For the December quarter, the government increased the interest rate on the five-year recurring deposit scheme while maintaining the rates on all other modest savings schemes. Every quarter, the government reviews the rate.
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What are small savings scheme?
Small savings programs are government-managed investment opportunities that enable individuals to save and accumulate wealth. 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) are currently available from the government.
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%
Should you invest in a small savings scheme?
Personal finance experts advise that, given the current economic instability, putting a percentage of one’s income in small savings plans is a sensible idea, particularly for those seeking to ensure returns. However, it is critical to remember that the returns on these schemes may not be as lucrative as those on equities
Three benefits of investing in a small savings scheme
1) Small savings schemes are government-backed, so participants can expect guaranteed returns on their deposits.
2) Many of these small savings schemes, such as PPF and SCSS, qualify for income tax breaks. Section 80C of the Income Tax Act provides you with benefits of up to 1.5 lakh rupees.
3) These small-scale savings plans can help you diversify your portfolio.
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