For the second quarter i.e. July-September of FY21 beginning today, interest rate on small savings schemes including the likes of NSC, PPF and such other instruments have been held steady. This is despite a downward trend in yield on 10-year benchmark bonds.
Small savings schemes see revision in interest rate on a quarterly basis based on the yield on 10-year government bonds.
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. Higher mobilization of funds under small savings would also enable government to borrow more from small savings schemes.
Further it is to be noted that amid the pandemic, the centre has extended the date for investment in small savings and life insurance products for claiming tax benefit for FY19-20 to July 31.
So, with rates remaining steady, here is what different small savings scheme would fetch you for July-September quarter:
Interest Rate On Small Savings Scheme For July-September quarter of FY21:
|Small savings instrument||Interest rate For July-September 2020|
|Kisan Vikas Patra||6.9% (with maturity in 124 months )|
|1-year time deposit||5.5%|
|2-year time deposit||5.5%|
|3-year time deposit||5.5%|
|5-year Time deposits||6.7%|
|Senior citizen savings scheme||7.4%|