Money

This savings plan is better than PPF

Published

6 years ago

January 4, 2019

rsuser

Small Savings Scheme

The government has revised the interest rates applicable to select small savings schemes. Investment in time deposits of one-year, two-year and three-year maturity periods will fetch interest at the rate of 7 per cent in the quarter ending March 31, 2019, the Ministry of Finance said in a statement. In the October-December period, the government paid interest rates of 6.9 per cent, 7 per cent and 7.2 per cent on one-year, two-year and time-year time deposits respectively. Interest rates applicable to all other small savings schemes, such as Public Provident Fund (PPF), Savings Deposit, Kisan Vikas Patra (KVP) and Sukanya Samriddhi, were kept unchanged, according to the statement.

Here are the interest rates paid by the government on small savings schemes in the fourth quarter of the current financial year (2018-19):

Instruments	Rate of interest with respect to October 1, 2018 to December 31, 2018	Rate of interest with respect to January 1, 2019 to March 31, 2019	Compounding frequency
Savings Deposit	4.0%	4.0%	Annually
1-Year Time Deposit	6.9%	7.0%	Quarterly
2-Year Time Deposit	7.0%	Quarterly
3-Year Time Deposit	7.2%	Quarterly
5-Year Time Deposit	7.8%	7.8%	Quarterly
5-Year Recurring Deposit	7.3%	7.3%	Quarterly
5-Year Senior Citizen Savings Scheme	8.7%	8.7%	Quarterly and paid
5-Year Monthly Income Account	7.7%	7.7%	Monthly and paid
5-Year National Savings Certificate	8.0%	8.0%	Annually
Public Provident Fund Scheme	8.0%	8.0%	Annually
Kisan Vikas Patra	7.7% (will mature in 112 months)	7.7% (will mature in 112 months)	Annually
Sukanya Samriddhi Account Scheme	8.5%	8.5%	Annually

Currently, the government revises the interest rates on small savings schemes on a quarterly basis. The finance ministry had in September last year announced an increase of up to 0.4 per cent in interest rates applicable to small savings schemes for the October-December quarter.

Investment in the nine small savings schemes earns interest at the rate of 4-8.7 per cent. The nine schemes are Savings Account, Five-Year Recurring Deposit, Time Deposit (TD), Monthly Income Scheme, Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF), National Savings Certificates, KVP and Sukanya Samriddhi.