Investment or deposit in any of the small savings schemes fetches a return to the tune of 4-8.7 per cent for the current quarter. India Post, which operates a network of more than 1.5 lakh post offices across the country, offers nine options under its small savings scheme portfolio. These include fixed deposit or time deposit (available in four options of maturities), recurring deposit, Public Provident Fund (PPF), Senior Citizen Savings Scheme, National Savings Certificate and Kisan Vikas Patra (KVP). Of these, the highest interest rate of 8.7 per cent per annum is applicable to the Senior Citizen Savings Scheme, according to India Post's website - indiapost.gov.in.
Here's a comparison of the interest rate and investment limits applicable to these small savings schemes (including Public Provident Fund):
| Small savings scheme | Interest rate | Minimum amount required for opening account | Maximum investment allowed |
|---|---|---|---|
| Savings account | 4% | Rs 20 | |
| Five-year recurring deposit account | 7.30% | Rs 10 per month | No limit |
| One-year time deposit (fixed deposit) account | 7% | Rs 200 | No limit |
| Two-year time deposit (fixed deposit) account | 7% | Rs 200 | No limit |
| Three-year time deposit (fixed deposit) account | 7% | Rs 200 | No limit |
| Five-year time deposit (fixed deposit) account | 7.80% | Rs 200 | |
| Monthly income scheme | 7.30% | Rs 1,500 | Rs 4.5 lakh |
| Senior citizen savings scheme (SCSS) | 8.70% | Rs 1,000 | Rs 15 lakh |
| 15-year public provident fund | 8% | Rs 500 | Rs 1.5 lakh per financial year |
| National savings certificate (NSC) | 8% | Rs 100 | No limit |
| Kisan Vikas Patra (KVP) | 7.70% | Rs 1,000 | No limit |
| Sukanya Samriddhi | 8.50% | Rs 1,000 | Rs 1.5 lakh per financial year |
| (Source: indiapost.gov.in) | |||
Interest rates on the nine small savings schemes (including four types of time deposit or fixed deposit) are currently revised every quarter. The current rates are applicable for the quarter ending on March 31, 2019.
Income tax benefits
Out of these small savings schemes, investment in the five-year term deposit (fixed deposit), Senior Citizen Savings Scheme (SCSS), 15 year Public Provident Fund and National Savings Certificates (NSC) qualifies for income tax benefit under Section 80C of the Income Tax Act.
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