Post office small savings schemes such as PPF, NSC, KVP, Sukanya Samriddhi and time deposits will fetch lower interest rate from New Year. The government in its latest revision of small savings scheme rates has cut interest rate by 20 basis points for the January-March period. However, the interest rate in the five-year Senior Citizens Savings Scheme has been retained at 8.3 per cent. Interest on post office savings deposits has also been retained at 4 per cent. Since April 2016, the government has been revising interest rate on small savings scheme on a quarterly basis, as compared to the annual mode earlier. The interest rate on small savings schemes are benchmarked to yields on government bonds, with a small mark-up.
PPF Interest Rate
Investments in PPF will fetch 7.6 per cent interest rate from January 1, 2018, as compared to 7.8 per cent earlier. PPF is one of the most popular long-term savings schemes. It enjoys EEE or exempt, exempt, exempt status in terms of income tax implication - contribution, interest and maturity proceeds all are tax free.
Interest Rate On Small Saving Schemes Effective January 1, 2018
Rate of interest (%) from 01/10/2017 To 31/12/2017
Rate of interest (%) from 01/01/2018 to 31/03/2018
1 year time deposit
2 year time deposit
3 year time deposit
5 year time deposit
5 year recurring deposit
5 year Senior Citizen Savings Scheme
quarterly and paid
5 year monthly income income scheme
monthly and paid
5 year National Savings Certificate
Public Provident Fund
Kisan Vikas Patra
7.5 (will mature in 115 months)
7.3 (will mature in 118 months)
Sukanya Samriddhi Account Scheme
(Interest rates on small savings schemes from January 1, 2018. Source: Ministry of Finance)
KVP, NSC and Post Office MIS Interest Rate
NSC or National Savings Certificate will fetch a lower annual rate of 7.6 per cent from January 1 while KVP or Kisan Vikas Patra will yield 7.3 per cent and mature in 118 months. Post Office Monthly Income Scheme, which pays interest on a monthly basis, will yield 7.3 per cent as compared to 7.5 per cent earlier.
Post Office Time Deposit And 5-Year Recurring Deposit Schemes
The interest rate 1-year, 2-year, 3-year and 5-year post office time deposits have been revised lower to 6.6 per cent, 6.7 per cent, 6.9 per cent and 7.4 per cent respectively. The five-year recurring deposit will fetch 6.9 per cent from January 1, as compared to 7.1 per cent earlier.