The government has kept the interest rates for small savings schemes, including popular public provident fund (PPF), unchanged for the January to March quarter. Every quarter, the government revises the Interest rate of small savings schemes, depending on the yield on government securities. So PPF and National Savings Certificates or NSC will continue to provide 7.9% interest rate annually for the January to March quarter.
Sukanya Samriddhi Account and Senior Citizen Savings Scheme will remain unchanged and will continue to provoide high rates. The girl child savings scheme Sukanya Samriddhi Account will continue to fetch 8.4% (compounded annually. The five-year Senior Citizens Savings Scheme will be same as well with a interest rate of 8.6%.
Analysts say that PPF and other small savings schemes like Sukanya Samriddhi Account and Senior Citizen Savings Scheme offer good returns for a conservative investor.
Kisan Vikas Patra (KVP) will also continue to offer interest rate of 7.6% (compounded annually) with maturity of 113 months. Or, in other others, investments will double in 113 months.
The monthly interest scheme, five-year Post Office Monthly Income Scheme (MIS) will continue to offer 7.6%.
Post office term deposits of 1-3 years will remain at the interest rate of 6.9% while the five-year at 7.7%. Post office 5-year recurring deposits will provide 7.2%.
The government has recently changed the rules of PPF accounts for the benefit of account holders. PPF account holders are now able to deposit in multiples of ₹50 any number of times in a financial year with a maximum of ₹1.5 lakh a year. Earlier, a maximum of 12 deposits were allowed in a period of 1 year.
Also, on change in residency status of the account holder on production of copy of passport and visa or income tax return, PPF subscribers can close their account prematurely after five years. The interest rate at which the account holder can borrow from his account has been reduced to 1% above the prevailing PPF interest rate, from 2% earlier.