This article will give you information about the latest amendments in interest rates of various small savings scheme applicable from 1 January 2018. The following are the various types of small savings scheme

 

Interest rates on Small Savings Scheme applicable from 01 Jan 2018

Scheme Name

Current Interest

Revised Interest rates w.e.f Jan 2018

Minimum Investment

Maximum Investment

Maturity

KisanVikasPatra(KVP)

7.8

7.7

1000

No limit

10.4 months

Post office time deposit

6.8

6.6

200

No limit

1 years

6.9

6.7

200

No limit

2 years

7.1

6.9

200

No limit

3 years

7.6

7.4

200

No limit

5 years

Recurring deposits(Post office)

7.1

6.9

10

No limit

5 years

National Savings Certificate(NSC)

7.8

7.6

100

No limit

5 years

Post-office Monthly income scheme

7.5

7.3

1500

4.5 Lakh and 9 Lakh

5 years

Public provident fund(PPF)

7.8

7.6

500

1.5 Lakh

15 Years

Senior Citizen savings Scheme(SCSS)

8.3

8.3

1000

1.5 Lakh

5 years

SukanyaSamriddhi Account(SSA)

8.3

8.1

1000

1.5 Lakh

When girl turns 21 years or on marriage

 

1. Kisan Vikas Patra (KVP):Kisan Vikas Patra is a saving certificate scheme which was first launched in 1988 by India Post. KVP certificates will be available in denomination of Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. There is no limit on the amount that can be invested. Initially, the certificates were sold through post offices. Later, they also got available at designated branches of public sector banks. In order to prevent the use of KVP by money launderers, investors will have to follow the know-your-customer (KYC) norms that apply to all national savings schemes.

 

2. Post office time deposit: This is similar to fixed deposits which are available for various time durations like 1year and upto 5 years. Currently you are beneficial if you invest for 5 years plan as it offer Interest at the rate of 7.4% of interest. The government has reduced the rate of interest at 6.9 % for the deposits upto 3 years

 

3. Recurring deposits (Post office):Recurring deposit is a deposit scheme which allows customers add to their savings by investing money which earns interest over a fixed period of time. Recurring deposit is opened for a fixed period of time and money is deposited as per conditions or at specified time intervals like monthly, quarterly and half yearly. It best option for investment as there is no requirement to invest huge amount. The current rate of interest on recurring deposit is paid at the rate of 7.1% but after the amendment made by government the interest rate will be reduced to 6.9% after January 2018.

 

4. National Savings Certificate(NSC):NSC is a tax saving time instrument with a maturity period of five and Ten Years. Presently, the interest is paid @ 7.80% p.a. on 5 year NSC which is reduce to 7.6%. Interest is Compounded Half Yearly. While the minimum investment amount is Rs 100, there is no maximum amount. Premature withdrawals are allowed only in case of special circumstances such as death of the holder. Investments in NSC are eligible for a deduction of upto Rs 150,000 p.a. under Section 80C. Furthermore, the accrued interest which is deemed to be reinvested qualifies for deduction under Section 80C. However, the interest income is chargeable to tax in the year in which it accrues.

 

5. Post-office Monthly income scheme:Post-office Monthly income scheme is one among all the small savings schemes. An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts). The account may be opened by an individual. Currently interest is paid at the rate of 7.3 % on such accounts.

 

6. Public provident fund(PPF):If you are a salaried employee then your employee must have deducted your contribution of PF if not then still you can voluntary contribute to provident fund. As current rate of interest is 7.6% and is tax free means more benefits waiting for you at the time of retirement. Your contribution is eligible for deduction under 80C.

 

7. Senior Citizen savings Scheme(SCSS):Senior Citizen Savings Scheme (SCSS) is the most profitable scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 8.3% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax. The account may be opened by an individual,

1 .Who has attained age of 60 years or above on the date of opening of the account?

2. Who has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.

3.No age limit for the retired personnel of Defence services provided they fulfill other specified conditions.

The government has kept rate of interest unchanged to 8.3%

 

8. Sukanya Samriddhi Account(SSA):‘Sukanya Samriddhi Account’ can be opened at any time from the birth of a girl child till she attains the age of 10 years, with a minimum deposit of Rs 1000. A maximum of Rs 1.5 lakh can be deposited during the financial year. Interest on this account is fully exempt from tax in the year of accrual as well as in the year of receipt. Interest is paid at the rate of 8.1%.

 

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