How to make the most from small savings schemes, Sukanya Samriddhi Yojana, PPF, NSC, KVP:
The government of India recently announced the much-desired hike in the interest rates on small savings schemes.
The government of India recently announced the much-awaited hike in the interest rates on small savings schemes, including the Public Provident Fund, Sukanya Samriddhi Yojana, recurring deposits, Kisan Vikas Patra (KVP) and National Savings Certificates. The rate hike announced was not the same as expected but it came as a huge relief for millions of small investors. After the hike, one can get an interest rate of 8 per cent on PPF, 8.5 per cent on Sukanya Samriddhi Yojana, 8.7 per cent on Senior Citizen Savings Scheme and 8 per cent on 5-year NSC - VIII Issue. The interest rates offered on these schemes are even higher than most of of the Fixed Deposit plans offered by commercial banks.
The rate has not been changed for time deposits. On time deposits of 1 year to 5 years, the interest rates now range from 6.9 per cent to 7.3. These rates match the FD rates of several public and private sector banks.
To get the most from these small savings accounts, one needs to keep in mind their respective limitations and also the dates from when the new rates will apply. The Sukanya Samriddhi Yojana (SSY) account can be opened only in the name of a girl child below 10 years of age. There is also a maximum investment cap of Rs 1,50,000 per year under SSY.
Check latest Small Savings schemes rate:
| Instrument | Rate of interest w.r.t. 01.07.2018 to 30.09.2018 | Rate of interest w.r.t. 01.10.2018 to 31.12.2018 | Compounding frequency* |
| Savings Deposit | 4 | 4 | Annually |
| 1 Year Time Deposit | 6.6 | 6.9 | Quarterly |
| 2 Year Time Deposit | 6.7 | 7 | Quarterly |
| 3 Year Time Deposit | 6.9 | 7.2 | Quarterly |
| 5 Year Time Deposit | 7.4 | 7.8 | Quarterly |
| 5 Year Recurring Deposit | 6.9 | 7.3 | Quarterly |
| 5 Year Senior Citizen Savings Scheme | 8.3 | 8.7 | Quarterly and paid |
| 5 Year Monthly Income Account | 7.3 | 7.7 | Monthly and paid |
| 5 Year National Savings Certificate | 7.6 | 8 | Annually |
| Public Provident Fund Scheme | 7.6 | 8 | Annually |
| Kisan Vikas Patra | 7.3 (will mature in 118 months) | 7.7 (will mature in 112 months) | Annually |
| SukanyaSamriddhi Account Scheme | 8.1 | 8.5 | Annually |
| * No Change |
In the Senior Citizen Savings Scheme (SCSS), persons, who have retired early and are between 50-60 years, can invest. Anyone can invest in the PPF, which in view of experts is one of the safest investment instrument. Out of the above schemes, SSY and PPF come with tax benefits.
You can start investing in SSY and PPF from today itself to enjoy the new rates. However, for getting the most from time deposits, RSs, SCSS, KVP, NSC, 5-year Monthly Income Account, invest from October 1.
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