Interest rates on Government Small Savings Scheme applicable from first quarter of financial year 1 April 2020 to 30 June 2020

Government has significantly reduce interest on small saving schemes from 1 April 2020 compared to last quarter

A brief introduction to all schemes

• Kisan Vikas Patra (KVP):

Kisan Vikas Patra is a saving certificate scheme in which certificates will be available in denomination of Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. There is no limit on the amount that can be invested. Available at designated branches of public sector banks.

• Post office time deposit:

This is similar to fixed deposits which are available for various time durations like 1 year and up to 5 years. Currently you are beneficial if you invest for 5 years plan as it offer Interest

• Recurring deposits (Post office):

Recurring deposit is a deposit scheme which allows customers add to their savings by investing money which earns interest over a fixed period of time. Recurring deposit is opened for a fixed period of time and money is deposited as per conditions or at specified time intervals like monthly, quarterly and half yearly.

• National Savings Certificate (NSC):

NSC is a tax saving time instrument with a maturity period of five and Ten Years. While the minimum investment amount is Rs 100, there is no maximum amount. Premature withdrawals are allowed only in case of special circumstances such as death of the holder. Investments in NSC are eligible for a deduction of upto Rs 150,000 p.a. under Section 80C. Furthermore, the accrued interest which is deemed to be reinvested qualifies for deduction under Section 80C.

• Post-office Monthly income scheme:

Post-office Monthly income scheme is one among all the small savings schemes. An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts). The account may be opened by an individual

• Public provident fund(PPF):

If you are a salaried employee then your employee must have deducted your contribution of EPF if not then still you can voluntary contribute to provident fund. Your contribution is eligible for deduction under 80C.

• Senior Citizen savings Scheme(SCSS):

Senior Citizen Savings Scheme (SCSS) is the most profitable scheme among all the small savings schemes but is meant only for senior citizens. Interest income is chargeable to tax. The account may be opened by an individual, Who has attained age of 60 years or above on the date of opening of the account

• Sukanya Samriddhi Account(SSA):

Sukanya Samriddhi Account can be opened at any time from the birth of a girl child till she attains the age of 10 years, with a minimum deposit of Rs 1000. A maximum of Rs 1.5 lakh can be deposited during the financial year. Interest on this account is fully exempt from tax in the year of accrual as well as in the year of receipt.