The government has not changed the interest rates of all small savings schemes including PPF and Sukanya Samriddhi Yojana (SSY). There will be no change in the interest rates for the third quarter (October-December 2021). The interest rates of these savings schemes are changed every quarter.
This will be the sixth consecutive quarter when there has been no change in the interest rates of small savings schemes. With this, those investing in these schemes have breathed a sigh of relief. After the reduction in the interest rates of savings schemes by banks, there was a possibility of reduction in the interest rates of PPF and post office savings schemes. At present, most banks are getting an average of 5.5 per cent interest on deposits of one to ten years.
Schemes of post offices more attractive than banks
At present, the interest rate of 7.1 percent is being available on PPF. Whereas for senior citizens, this rate is 7.4 percent. Account holders of Sukanya Samriddhi Yojana get 7.6 percent interest. The interest rate on the 5-year monthly income scheme in the post office is 6.6 percent. At the same time, 6.8 percent interest is being given on the five-year National Savings Certificate (NSC). The interest rate on one year term deposit is 5.5 per cent. An interest rate of 6.7 per cent per annum is available on the five-year term deposit rate.
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PPF Most Popular
PPF is the most popular among small savings schemes. Because the interest earned on PPF is tax free under section 10 of the Income Tax Act 1961. Secondly, the benefit of compounding is available in interest. Apart from this, PPF has got sovereign guarantee. That is, it is the responsibility of the government to protect it. However, the term plans of the post office are more attractive than the banks. On this, tax benefit is available under section 80C. The Senior Citizen Scheme of the Post Office is very popular. Under this, investment schemes are open to the elderly above 60 years of age.
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