By The Buyt Desk
The interest rates of small savings schemes remain the same for the Jan-Feb-March quarter of 2020-21. The interest of small savings like Public Provident Fund(PPF), Senior Citizen Saving Scheme(SCSS) and Sukanya Samridhi Yojna (SSY) is revised every three months. The government informed in a statement, “The rates of interest on various small savings schemes for the fourth quarter of 2020-21, shall remain unchanged from those notified for the third quarter (October to December).”
Let us have a look at the interest rate on some of the small savings schemes:
Public Provident Fund (PPF): PPF will continue to give an interest of 7.1 %. A PPF account is a long term investment which matures in 15 years. PPF also gets the investor tax deduction under the section 80C of Income Tax Act 1961. Interest received is tax-free, and the PPF amount received at the time of maturity is also tax exempted. An investor can deposit a minimum of Rs 500 in a year and a maximum of Rs 1.5 lakh. Partial withdrawal is permitted only after the completion of 5 years. An investor can extend a PPF account beyond 15 years. This extension will be in a block of 5 years.
Senior Citizen Savings Scheme (SCSS): The investors of 60 years and above earn quarterly interest income through deposits in SCSS. The investors can deposit up to Rs 15 lakh in a Senior Citizen Savings Scheme. The interest of SCSS has also remained unchanged from the October-December quarter, and it will be 7.4%.
Sukanya Samriddhi Yojana (SSY): SSY is a popular girl child saving scheme. It will give an interest of 7.6%. Parents of a minor girl child can open a savings account. The investment gets matured in 21 years or when the girl attains the age of 18 years. The idea is that parents can accumulate some fund for girls higher education. Benefit for parents is that they get the tax deduction on the investment. A tax benefit of Rs.1.5 lakh is applicable on the contribution towards SSY as per the section 80C of Income Tax Act of 1961.
Post Office Time Deposits: These time deposits are exactly like fixed deposits offered by banks. The interest on time deposits of a five-year term will be 6.7% and deposits of the shorter term of 1-3 years will give an interest rate of 5.5%. The post office deposits have a tenure of 1, 2, 3 or 5 years.
National Savings Certificate (NSC): The NSC will continue to fetch interest of 6.8%. It gets compounded annually and is paid when it matures. NSC is a fixed income investment scheme. The investment in NSC qualifies for a tax saving under section 80C of the Income Tax Act.
The Kisan Vikas Patra (KVP): Interest on KVP will be at 6.9%. It will mature or double in value in 124 months (10 years and 4 months). KVP certificates are issued by Post offices across the country. This scheme is a long term investment plan as you can reap the benefit of compound interest only after you stay invested for 124 months.
