Small Saving Schemes: How Unchanged Rates For The July-September Quarter Can Help In Increasing Wealth
Investors can breathe a sigh of relief as the government made no changes to the interest rates of small-saving schemes such as Public Provident Fund (PPF) or National Savings Certificate (NSC), in the second quarter of the financial year. On June 30, 2021, the finance minister announced through a circular that small saving schemes would earn the same interest rates as they did during the quarter ending June.
This will benefit small investors by providing them with better rates than other avenues of fixed incomes such as bank fixed deposits. Small saving schemes are avenues of investment that provide investors with safe options to park their money as well as offer attractive returns.
Small saving schemes are a safe and disciplined way to park money. Here are 5 of the most popular small saving schemes:
1) Public Provident Fund
This scheme is the most popular investment option. The benefit of this investment option is that all interest earned from investing in this scheme is exempt from tax. The period of this scheme is 15 years and can be opened at a post office or the bank.
2) Post-Office Saving Scheme
There are various investment options that are offered under this scheme. It is very popular as the rate of risk is minimal and favourable returns are guaranteed. These options are also attractive as the documentation required to open these small saving accounts are minimal and the process is quick.
3) Senior Citizens Saving Scheme
Aimed to help citizens who are 60 years and above, this scheme requires a minimum deposit of Rs. 1,000. The duration of this investment scheme is 5 years.
4) Employees Provident Fund (EPF)
This investment scheme aims at helping employees save funds for their retirement. Organisations with more than 20 employees must mandatorily contribute to EPF.
5) National Savings Certificate (NSC)
It's another popular scheme like the PPF. This scheme is backed directly by the Government of India, and it guarantees tax benefits and favourable returns. The duration of the scheme is 5 years and can be opened at a post office.
With the interest rates remaining the same for small saving schemes, it comes as a major benefit to debt investors as they can continue fetching favourable returns at minimal investments in the July-September quarter as well.