In news that will cheer up small investors, the Government of India has decided to maintain status quo on interest rates on small savings schemes or post office schemes for the July-September quarter of FY 2020-21. The Department of Posts released a circular dated July 1, 2020, on this.
Earlier, the government had slashed the small savings schemes interest rates by 70 to 140 basis points (bps) for the April-June quarter.
As per the circular, the Public Provident Fund (PPF) will continue to earn 7.10 per cent. The Senior Citizens Savings Scheme (SCSS) will continue to earn 7.40 per cent, and post office time deposits will fetch 5.5-6.7 per cent. The interest rates will be applicable for the period July 1, 2020, to September 30, 2020.
In these uncertain times, small saving schemes are still a good investment bet as they provide capital safety, guaranteed returns and also provide taxation benefits. For risk-free investors, who want capital safety, these government-backed small savings scheme can be a good option. They also help you in achieving specific financial goals by minimising risks.
If you are looking to invest in risk-free small saving schemes, here are the latest interest rates:
|Small Saving Scheme |
|Interest Rate From July 1, 2020 |
|Public Provident Fund (PPF)||7.1% per annum (compounded yearly)|
|Sukanya Samriddhi Account Scheme||7.6 Per Annum (compounded yearly)|
|Savings Account||4 % Per Annum (compounded yearly)|
|Post Office Time Deposit 1-Year||5.5% (Quarterly)|
|Post Office Time Deposit 2-Year||5.5% (Quarterly)|
|Post Office Time Deposit 3-year||5.5% (Quarterly)|
|Post Office Time Deposit 5-Year||6.7% (Quarterly)|
|Kisan Vikas Patra (KVP )||6.9% (compounded yearly). Amount Invested doubles in 113 months (9 years & 5 months)|
|National Savings Recurring Deposit Account||5.8 (Compounded quarterly)|
|National Savings Certificate (NSC) |
|6.8 (Compounded yearly) |
|Senior Citizen Savings Scheme (SCSS)||7.4% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December. |
|Post Office Monthly Income Scheme Account (MIS)||6.6 % per annum payable monthly|
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