What are New Rates on PPF, Small Savings Schemes?

The government withdrew its a day before the order of reduction of 40-110 basis points in interest rates of small savings schemes including Public Provident Fund (PPF) and National Savings Certificate (NSC).

What was the announcement?

As per an announcement on March 31, the government announced a sharp cut in the interest rate of PPF, NSC, and others. As per the order, PPF would have fetched an interest rate of 6.4 percent and NSC 5.9 percent. But, the order has been withdrawn on April 1. The present interest rates of the schemes are given below.

Public Provident Fund (PPF)

A Public Provident Fund or PPF will give an interest rate of 7.1 percent (compounded annually). PPF is a long-term tax-saving instrument that provides a fixed rate of interest annually on the amount that you invested during the year. PPF has a lock-in period of 15 years. The interest earned in a PPF account is tax-free. The amount that is deposited during the fiscal year can be claimed under Section 80C.

National Savings Certificate (NSC)

A National Savings Certificate or NSC gives an interest rate of 6.8 percent which is compounded annually but payable at maturity. NSC has a tenure of five years and comes with a fixed rate of interest.

Sukanya Samriddhi Account Scheme

Sukanya Samriddhi Account Scheme will provide an interest of 7.6 percent compounded annually. It is also known as Sukanya Samriddhi Yojana and was launched in the year 2015 as part of the “Beti Bachao, Beti Padhao” initiative of the government. It can only be opened by the natural or legal guardian of a girl child aged below 10 years.

The account matures after 21 years from the date of opening. If the marriage of the account holder takes place before 21 years, then the operation of the account is not permitted beyond the date of her marriage.

Kisan Vikas Patra

Kisan Vikas Patra is a savings scheme available at the India Post Offices in the form of certificates. The scheme provides a fixed rate and doubles the investment after a predetermined period of time. At present, the interest rate is 6.9% and the time period is 124 months.

Senior Citizen Savings Scheme

Senior Citizen Savings Scheme at present offers an interest rate of 7.4 percent (compounded quarterly). The scheme is available for those over 60 years of age.

Month: Current Affairs - April, 2021