Sukanya Samriddhi, along with other small savings schemes such as the 3-year Time Deposit, has witnessed an increase in interest rates by the Central Government for the January-March 2024 quarter. As per a notification from the Union finance ministry, most schemes maintained consistent interest rates, with only minor adjustments specifically for Sukanya Samriddhi and the 3-year time deposit.”
In the latest update, the interest rate for Sukanya Samriddhi Scheme is now 8.2%, and for the 3-year Time Deposit, it is 7.1% for the last quarter of this year. Earlier, Sukanya Samriddhi Scheme and 3-year Time Deposit had interest rates of 8.0% and 7.1%, respectively. The rates for the Public Provident Fund (PPF) have remained the same for over three years. The last change was in April-June 2020, when it was reduced from 7.9% to 7.1%.
In the recent announcement, the government maintained the interest rates for small savings during the October-December quarter, with only a slight uptick in the rates for the five-year recurring deposit. Prior to this update, interest rates for various small savings schemes varied from 4% (post office savings deposits) to 8.2% (Senior Citizens Savings Scheme). For the upcoming January-March 2024 quarter, the interest rate for Savings Deposit will be 4%.
Interest Rates for Various Small Savings Schemes (January-March 2024)
| S.No | Saving Scheme | Interest Rates (%) |
| 1. | 1-Year Post Office Time Deposits | 6.9 |
| 2. | 2-Year Post Office Time Deposits | 7.0 |
| 3. | 3-Year Post Office Time Deposits | 7.1 |
| 4. | 5-Year Post Office Time Deposits | 7.5 |
| 5. | 5-Year Recurring Deposits | 6.7 (previously 6.5) |
| 6. | National Saving Certificates (NSC) | 7.7 |
| 7. | Kisan Vikas Patra | 7.5 (matures in 115 months) |
| 8. | Public Provident Fund (PPF) | 7.1 |
Sukanya Samriddhi Account:
| S. No. | Saving Scheme | Interest Rates (%) |
| 1. | Senior Citizens Savings Scheme | 8.2 |
| 2. | Monthly Income Account | 7.4 |
There are three types of small savings schemes: savings deposits, social security schemes, and monthly income plans. The interest rates provided by the government for most of these schemes, such as Post Office Fixed Deposit, are already comparable to the rates offered by banks for term deposits
Small savings schemes can be a smart way to cut down on your income tax. Thanks to Section 80C of the Income Tax Act, you can get deductions of up to Rs 1.5 lakh each year from your taxable income. All you have to do is invest in schemes like PPF, SCSS, NSC, SSY, and the 5-Year Post Office Time Deposit Scheme.
FAQs
What are small savings schemes?
- Small savings schemes are government-backed investment options designed for individuals to save money with various benefits, including tax advantages and attractive interest rates.
Which small savings schemes offer tax benefits?
- Schemes such as Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), and the 5-Year Post Office Time Deposit Scheme provide tax deductions under Section 80C of the Income Tax Act.
How do small savings schemes compare to bank fixed deposits?
- The government often claims that the interest rates on small savings schemes are competitive and sometimes better than those offered by public and private banks on fixed deposits.
Can I invest in multiple small savings schemes simultaneously?
- Yes, individuals can invest in multiple small savings schemes simultaneously to diversify their savings portfolio and take advantage of the unique features each scheme offers.
Are there any recent changes in the interest rates for small savings schemes?
- Interest rates for small savings schemes can be subject to periodic revisions by the government. It’s advisable to stay updated with the latest announcements from the relevant authorities regarding any changes in interest rates
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