Top small savings schemes interest rates: From NSC, PPF recurring deposit, Senior Citizens Savings Scheme, time deposit and more

Small savings schemes interest rates: A day after announcing a cut in interest rates, government has taken a U-turn and this has come as a big breather for all investors who have invested various small savings schemes like NSC, PPF recurring deposit, Senior Citizens Savings Scheme, time deposit and others. The government has withdrawn its office memorandum issued on 31st March, 2021 regarding the cut in interest rates. As things stand now, the Small Savings Schemes of the Government of India will have the same interest rates which existed in the January-December quarter of 2020-2021. They will likely stay the same for the entire quarter. If you don’t know the current interest rates on different savings scheme and are planning investments, then here is your answer. 

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Small Savings Schemes interest rates - See complete details here: 

Instruments                      Rate of Interest for April-June 2021         Compounding Frequency     

Savings Deposit                                4%                                                     Annually 

1 yr time deposit                                5.5%                                                  Quarterly 

2 yr time deposit                                5.5%                                                  Quarterly 

3 yr time deposit                                5.5%                                                   Quarterly 

5 yr time deposit                                6.7%                                                   Quarterly 

5 yr recurring deposit                         5.8%                                                   Quarterly 

Senior Citizens Savings Scheme       7.4%                                                   Quarterly and paid 

Monthly Income Account                    6.6%                                                   Monthly and paid 

National Savings Certificate               6.8%                                                    Annually 

Public Provident Fund                         7.1%                                                   Annually 

Kisan Vikas Patra                                6.9%                                                   Annually 

Sukanya Samriddhi Account                7.6%                                                  Annually 

The small savings schemes basket comprises 12 instruments, including the National Saving Certificate (NSC), Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and Sukanya Samridihi Scheme. The government resets the interest rate at the beginning of every quarter. 

While every small savings scheme being run by the Government of India serves a specific purpose and has been designed to serve varying needs of the investors. These schemes are tailor-made for people who do not have a big risk appetite and want to invest in instruments which offer assured returns, Expert in Personal Finance matters Jitendra Solanki said. He said that while the returns are assured, they also come with a sovereign guarantee, which is its biggest plus. He said that one should remain invested in such schemes. 

They are also suitable for people who cannot invest big amounts at one go and these schemes encourage savings and gradual building of a corpus.  

The investors can choose between the schemes as per their needs.  

The biggest advantage of these is schemes is that they offer income tax benefits. Investments in these schemes are eligible for tax exemptions up to maximum Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961. Some of the best schemes which gives tax benefits are- NPS, PPF, SSY, NSC, Senior Citizen’s Savings Schemes.