Small Savings Schemes That Offer Returns Of 7% And Above

The government offers nine small savings schemes and offers an interest rate of seven per cent and above on eight of them. The schemes -- Five-Year Recurring Deposit, Time Deposit (TD), Monthly Income Scheme, Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF), National Savings Certificates, Kisan Vikas Patra and Sukanya Samriddhi -- are available at post office and banks. The government revises the interest rates on small savings schemes every quarter. Earlier this week, the Ministry of Finance revised the interest rates on select schemes. 

Here's everything you need to know about Small Savings Schemes offering returns of 7 per cent and above:

1. Five-Year Recurring Deposit: The scheme offers an interest of 7.3 per cent per annum. On maturity, a recurring deposit of Rs 10 per month fetches a return of Rs. 725.05. The post office five-year RD account can be continued for another five years on a year-to-year basis.

2. Time Deposit Scheme: Investment in time deposits of one-year, two-year and three-year maturity periods fetch an interest of 7 per cent. In the October-December period, the government paid interest rates of 6.9 per cent, 7 per cent and 7.2 per cent on one-year, two-year and three-year time deposits respectively. On five-year Time Deposit, it offers a return of 7.8 per cent. The interest is payable annually but calculated quarterly.

3. Monthly Income Scheme: The MIS account offers an interest rate of 7.7 per cent per annum. The interest on post office monthly income scheme (MIS) account is payable monthly. The minimum amount required to set up a monthly income account is Rs. 1,500. 

4. Senior citizen Savings Scheme: An individual of the age of 60 years or more is eligible for the scheme. The scheme offers an interest rate of 8.7​ per cent  per annum, payable from the date of deposit of March 31/ September 30 / December 31 in the first instance and thereafter, interest shall be payable on March 31, June 30, September 30 and December 31.

5. 15-year Public Provident Fund Account: The scheme offers an interest rate of 8 per cent per annum, which is compounded yearly. One can open an account with Rs. 100 but needs to deposit a minimum of Rs. 500 in a financial year.

6. National Savings Certificates: The NSC fetches an interest rate of 8 per cent per annum and deposits under it also qualify for deduction under Section 80C of the Income Tax Act. This interest is compounded annually but payable at maturity. An NSC of Rs. 100 will offer Rs. 146.93 on maturity after five years.

7. Kisan Vikas Patra: The annual return on KVP is 7.7 per cent. Investment in this scheme doubles in a period of 112 months (nine years and four months). A Kisan Vikas Patra account can be opened in a post office against a minimum of Rs. 1,000.

8. Sukanya Samriddhi Account: The scheme, which is only for a girl child, fetches an interest rate of 8.5 per cent per annum is calculated and compounded on a yearly basis. The account requires a minimum and maximum investment of Rs. 1,000 and Rs. 1,50,000 in a financial year respectively.