The government today kept interest rates for small savings schemes, including popular public provident fund (PPF), unchanged for the January to March quarter. Interest rate of small savings schemes are revised every quarter, depending on the yield on government securities. So PPF and National Savings Certificates or NSC will continue to fetch 7.9% interest rate annually for the January to March quarter.
Sukanya Samriddhi Account and Senior Citizen Savings Scheme continue to offer higher rates than other small savings schemes. The girl child savings scheme Sukanya Samriddhi Account will continue to fetch 8.4% (compounded annually. The five-year Senior Citizens Savings Scheme will also continue to offer a interest rate of 8.6%.
Analysts say that for a conservative investor, PPF and other small savings schemes like Sukanya Samriddhi Account and Senior Citizen Savings Scheme offer good returns.
Another small savings scheme Kisan Vikas Patra (KVP) will continue to offer interest rate of 7.6% (compounded annually) with maturity of 113 months. Or, in other others, investments will double in 113 months.
The five-year Post Office Monthly Income Scheme (MIS), where interest is paid out monthly, will continue to offer 7.6%.
Post office Term deposits
Post office term deposits of 1-3 years continue to offer interest rate of 6.9% while the five-year at 7.7%. Post office 5-year recurring deposits will fetch 7.2%.
The government recently tweaked rules for PPF accounts for the benefit of account holders. PPF account holders can now make deposits in multiples of ₹50 any number of times in a financial year with a maximum of ₹1.5 lakh a year. Earlier, a maximum of 12 deposits were permitted in a period of 1 year.
Also, on change in residency status of the account holder on production of copy of passport and visa or income tax return, PPF subscribers can close their account prematurely after five years. The interest rate at which the account holder can borrow from his account has been reduced to 1% above the prevailing PPF interest rate, from 2% earlier.