Post office small savings schemes like Public Provident Fund (PPF), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), Senior Citizens Savings Scheme (SCSS), Post Office Time Deposit (POTD), Post Office Recurring Deposit (PORD), Sukanya Samriddhi Yojana (SSY), Post Office Monthly Income Scheme (POMIS) have been considered good choices since they offer safe investment, involve lower risks, provide transfer facility, nomination facility and offer higher interest rates than other schemes by banks. But do these schemes still offer a better interest rate? In this article, we will find out.
The rates of interest of such schemes are actually updated by the Ministry of Finance in every three months. The interest rates are actually based upon the proportional profits on government securities and are done in line with restraint in the overall rate of interest in the sector of finances.
With the current state of the economy, there has been an expected result in the revised rates of interest decided by the government. The current state of the pandemic has hugely impacted the market and hence the rates of interest have been reduced by the government for different schemes, including almost all postal savings schemes. Rates of interest of different postal savings schemes have been mentioned below:
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Public Provident Fund (PPF)
This long-term safe mode of investment which is actually a success among the nation with maturity tenure of 15 years, is facing a reduction of 80 basis points so now for this quarter, the rate of interest is reduced to 7.1 percent from 7.9 percent earlier.
National Savings Certificate (NSC)
This postal savings scheme which is popular among citizens for giving good returns and tax benefits is facing now a reduced rate of interest being 6.8 percent for this quarter as compared to 7.9 percent before.
Kisan Vikas Patra (KVP)
Kisan Vikas Patra which is known to double the invested value currently in 124 months, fetching an interest rate of 6.9 percent for this quarter as compared to 7.6 percent earlier.
Post Office Recurring Deposits (RD)
This postal scheme is known for letting citizens invest for a tenure of five years. This quarter, the interest rate reduced to 5.8 percent. Earlier, the interest rate was 7.2 percent.
Post Office Term Deposits (TD)
This postal savings scheme is facing a reduced interest rate of 5.5 percent for deposits of 1-3 years and 6.7 percent for deposits of 5 years.
Senior Citizens Savings Scheme (SCSS)
This postal savings scheme which was specially designed for senior citizens is yielding an interest rate of 7.4 percent as compared to 8.4 percent earlier.
Sukanya Samriddhi Yojana (SSY)
This postal savings scheme specifically designed to help parents of the girl child to save money for the welfare of girl child is offering an interest rate of 7.6 percent as compared to 8.4 percent earlier.
Post Office Monthly Income Scheme (POMIS)
This scheme offers an interest rate of 6.6 percent compared to 7.6 percent earlier.