On Wednesday, the centre kept the interest rate of various small savings schemes such as PPF, NSC and Senior Citizens Savings scheme among others unchanged for the October-December quarter. This comes as a relief for fixed income investors amid falling interest rate on fixed deposits.
The interest rate on small savings schemes are reviewed every quarter based on the yield of 10-year government bonds. The finance ministry notifies the same quarter-on-quarter. Economic affairs Secretary Tarun Bajaj on Wednesday while revealing centre's borrowing target for the second half of the current fiscal said there is no change in small savings rate for the third quarter.
Thereafter a notification from the finance ministry said the interest rate on various small savings schemes for the third quarter of FY 2020-21 ending on December 31 shall remain unchanged from those notified for the second quarter (July-September).
The move will encourage more investors to consider investment in these government backed schemes which are highly safe and provide assured returns in addition to tax deduction under section 80 C up to a limit of Rs. 1.5 lakh in a fiscal year.
So, with rates held steady, below is given a table listing out rate on small savings schemes for the October-December quarter.
|Small Savings Scheme||Interest rate for Oct-Dec quarter|
|Kisan Vikas Patra||6.9% (with maturity in 124 months )|
|1-year time deposit||5.50%|
|2-year time deposit||5.50%|
|3-year time deposit||5.50%|
|5-year time deposit||6.70%|
|Senior citizen savings scheme||7.40%|
|Sukanya Samriddhi scheme||7.60%|