The government on Wednesday announced its decision to retain interest rates applicable to small savings schemes at existing levels for the coming quarter. There is no change in the interest rates applicable to small saving schemes, Economic Affairs Secretary Tarun Bajaj said on Wednesday. This means investments in the nine small savings schemes - including the Public Provident Fund (PPF) - will continue to fetch returns at existing rates in the quarter ending December 31. Currently, small savings schemes pay annual returns to the tune of 4-7.6 per cent.
Here are the interest rates applicable to small savings schemes in the third quarter of the current financial year (October-December 2020):
|Small Savings Scheme||Interest Rate||Minimum Amount Required For Opening Account|
|Post Office Savings Account||4%||Rs 500|
|5-Year Post Office Recurring Deposit (RD) Account||5.8%||Rs 100 per month|
|Post Office Time Deposit (TD) Account - One Year||5.5%||Rs 1,000|
|Post Office Time Deposit Account (TD) - Two Years||5.5%||Rs 1,000|
|Post Office Time Deposit Account (TD) - Three Years||5.5%||Rs 1,000|
|Post Office Time Deposit Account (TD) - Five Years||6.7%||Rs 1,000|
|Post Office Monthly Income Scheme Account (MIS)||6.6%||Rs 1,000|
|Senior Citizen Savings Scheme (SCSS)||7.4%||Rs 1,000|
|15-Year Public Provident Fund Account (PPF)||7.1%||Rs 500|
|National Savings Certificates (NSC)||6.8%||Rs 1,000|
|Kisan Vikas Patra (KVP)||6.9%||Rs 1,000|
|Sukanya Samriddhi Account||7.6%||Rs 250|
Currently, the government offers nine types of small saving schemes, including the 15-year PPF scheme, the Senior Citizen Savings Scheme (SCSS), the Kisan Vikas Patra certificates and the Monthly Income Scheme (MIS). The finance ministry reviews the interest rates on the nine small savings schemes on a quarterly basis.
Some of these post office saving schemes qualify for income tax benefits.