No change in interest rates of small savings schemes

K. ARAVIND

For the fourth quarter from January 1 to March 31, 2021, interest rates on small savings schemes remained unchanged. The interest rate for the previous quarter will remain the same till March 31.

The interest rate from the Public Provident Fund (PPF) will remain at 7.1 per cent. The interest rate on the Senior Citizen Savings Scheme is 7.4 per cent. The interest rate on Sukanya Samridhi Yojana will remain at 7.6 per cent.

The interest rate on a one-year to three-year depot is 5.5 per cent. The five-year deposit carries an interest rate of 6.7 per cent. The interest rate on the National Savings Certificate is 6.8 percent. Kisan Vikas will remain at 6.9 per cent. The investment period of Kisan Vikas Patra is 124 months. The interest rate on five-year recurring deposits is 5.8 per cent.

The interest rates on most small savings schemes are still higher than the fixed deposits of banks. From the financial year 2016-17 onwards, the Central Government has revised the interest rates on small savings schemes to be re-determined every financial year. Instead, the government was introducing a quarterly rate revision for interest rates based on the yield on bonds.

PPF currently offers the highest interest rates on savings plans available to all types of investors. The investment period in PPF is 15 years. The attractiveness of PPF is that the interest on the investment is not taxable.

The investment period of PPF is 15 years. Up to the completion of five years, there is a facility to withdraw up to 50 per cent of the balance at the end of four years. The investment can be withdrawn only once in a financial year. The investment can be extended after 15 years for a period of five years. You can open a PPF account at a bank or post office. PPF can also be invested online in some private banks. A maximum of Rs.1.5 lakhs can be deposited in one or more installments in a financial year.

Sukanya Samridhi Yojana offers the highest interest rates. This is an investment scheme that can be started by parents in the name of girls 10 years of age or below. The interest rate is currently 8.5 per cent. Gains on withdrawal of investment after maturity are tax free.