From April 1, investment in the Public Provident Fund (PPF), which is one of the nine government-run small savings schemes, fetches return at the rate of 7.1 per cent. That is 80 basis points lower compared with the interest rate of 7.9 per cent paid in the January-March quarter. A Public Provident Fund account can be set up at designated branches of post office and commercial banks for a lock-in period of 15 years. The interest accrued on a PPF account is compounded annually.
While the 15-year PPF account now pays a 7.1 per cent return, here are the interest rates applicable to other small savings schemes:
| Instrument | Interest Rate In January-March | Interest Rate In April-June | Compounding Frequency |
|---|---|---|---|
| Savings Deposit | 4% | 4% | Annually |
| One-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Two-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Three-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Five-Year Time Deposit | 7.7% | 6.7% | Quarterly |
| Five-Year Recurring Deposit | 7.2% | 5.8% | Quarterly |
| Senior Citizen Savings Scheme (SCSS) | 8.6% | 7.4% | Quarterly and paid |
| Monthly Income Account | 7.6% | 6.6% | Monthly and paid |
| National Savings Certificate | 7.9% | 6.8% | Annually |
| Kisan Vikas Patra | 7.9% (matures in 113 months) | 6.9% (matures in 124 months) | Annually |
| Sukanya Samriddhi Account | 8.4% | 7.6% | Annually |
| (Source: dea.gov.in) | |||
For the first quarter of financial year 2020-21, the government has lowered interest rates on most small savings schemes such as the Kisan Vikas Patra (KVP), the Senior Citizen Savings Scheme (SCSS) and the National Savings Certificates (NSC) by 80-140 basis points (0.8-1.4 percentage point), according to an official statement.
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