The government raised the interest rate on the five-year recurring deposit scheme for the December quarter and retained the rates for all other small savings schemes. The government reviews the rate every quarter.
Small savings schemes are investment avenues offered and managed by the government that allow individuals to save and accumulate wealth. Currently, the government offers nine types of small saving schemes, including Recurring Deposit (RD), Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Mahila Samman Saving Certificate, Kisan Vikas Patra, National Savings Certificate. (NSC) and Senior Citizen Savings Scheme (SCSS).
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For the October- December 2023 quarter, the interest rates on small savings schemes are as follows:
PPF - 7.1%
SCSS - 8.2%
Sukanya Yojana - 8.0%
NSC - 7.7%
PO-Monthly Income Scheme - 7.4%
Kisan Vikas Patra - 7.5%
1-Year Deposit - 6.9%
2-Year Deposit - 7.0%
3-Year Deposit - 7.0%
5-Year Deposit - 7.5%
5-Year RD - 6.7%
Personal Finance Experts suggest that seeing the economic volatility, investing some portion in small savings schemes can be a good option, especially for those looking to secure returns. However, it is crucial to keep in mind that the returns for these schemes may not be as lucrative as equities.
1) Small savings schemes are government-backed so investors can enjoy assured returns on their investments.
2) Many of these small savings schemes like PPF, and SCSS qualify for income tax benefits. You get benefits under Section 80C of the I-T Act, going up to ₹1.5 lakh
3) These small saving schemes can be good options to diversify your portfolio.
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