Small Savings Schemes Interest Rates: April-June 2019
Small Savings Schemes interest rates remain unchanged for the 1st Quarter of the Financial Year (FY) 2019-20. The interest rate on popular Savings Schemes like Kisan Vikas Patra (KVP), Public Provident Fund (PPF) and National Savings Certificate (NSC) has been retained for the current period; the rates were last revised in the 3rd Quarter of FY 2018-19. Government had decided to align the small savings interest rates with the relevant market rates of Government Securities. The rates are now recalibrated every quarter in order to maintain it at par with the current market rates. The interest rates on Small Savings Schemes are slightly higher as compared to rates offered by Banks, along with Tax Benefits on Selected Schemes.
The Central Bank (RBI) had been clamoring for revision in rates as it is leading to distortion in rate structure. Government is trying to provide a level playing field to the Banks by aligning the deposit rates to the market rates.
Small Savings Schemes Interest Rates For Financial Year 2018-19 & FY 2017-18
Government had raised the interest rates for the 3rd Quarter of FY 2018-19 following higher yield on the Government Securities. Thus, Investors will benefit from the hike in interest rates on popular investment schemes.
The interest rate was raised by up to 0.4% for the 3rd Quarter (October- December) of the Financial Year 2018-19. The most popular tax saving scheme Public Provident Fund scheme offers 8% return as compared to 7.6% return in the 2nd quarter of FY 2018-19. Thereby, schemes are appealing to risk adverse investors. Similarly, 5 Year National Savings Certificate (NSC) will also earn 8% return on the investment.
The Government announces the deposit rates across all Small Savings Scheme on quarterly basis. The current rates are applicable from 1st April,’19 till 30th June,’19. The interest rates are now determined at par with rates of Government Securities.
Small Savings Schemes Interest Rates applicable on various Savings Scheme (Click on link below to read more about the Schemes)
Public Provident Fund (PPF): Investment in PPF will earn 8% return for the quarter ending 30th June,’19. Government has also permitted premature closure of PPF account in genuine cases, such as serious ailment, higher education of children, etc applicable to accounts which have completed 5 years from the date of opening. However, a penalty of 1% reduction in interest payable on whole deposit is imposed in case of premature withdrawal.
National Savings Certificate (NSC): The 5 year NSC will continue to earn an interest of 8% from 1st October,’18 as compared 7.6% earned previously. The interest is compounded annually.
Kisan Vikas Patra (KVP): KVP investors will fetch 7.7% return for the Quarter ending 30th June,’19. The interest is compounded annually.
Sukanya Samriddhi Scheme (SSS): Scheme introduced for empowerment of the Girl child will earn 8.5% interest on investment till 30th June,’19.
Senior Citizen Savings Scheme (SCSS): The rate has been retained at 8.7% till 30th June,’19. The scheme is aimed at the welfare of the senior citizens.
Post Office Schemes: Interest Rates on Post Office Term Deposits of 1 year, 2 year and 3 years will continue to fetch 7% return on deposits. Term Deposits of 5 years will also continue to fetch returns at 7.8% for the period. Monthly Income Scheme (MIS) will draw an interest of 7.7% on deposits. Savings deposit returns retained at the rate of 4%.