PPF, Time Deposits, Sukanya Samriddhi, SCSS, Others; Small Saving Schemes Interest Rates For Oct-Dec

The government has announced the interest rates of small saving schemes for the three-month quarter between October to December 2023. The Centre hiked only one small saving scheme by 20 bps while keeping interest rates unchanged in schemes like senior citizens savings accounts (SCSS), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), Public Provident Fund (PPF), Sukanya Samriddhi Account, and 1-5 year time deposits. The new interest rates will come into effect from October 1, 2023.

Here are the latest interest rates for small savings schemes between October to December 2023 quarter:

1. 5-Year Recurring Deposits:

The government made the 5-year recurring deposits scheme attractive by hiking the rate by 20 bps to 6.7% from the current 6.5%. As the name suggests, this Post Office scheme has a tenure of 5 years, and depositors can open this account with a minimum of Rs 100 per month to open the account. There is no maximum limit. The interest rates are compounded annually.

2. Public Provident Fund (PPF):

The interest rate for the PPF account is kept at 7.4% for Q3 of FY24, unchanged from the previous quarter. PPF is among the most popular and top retirement tax benefits saving schemes available in India. A PPF account can be opened with a minimum of Rs 500 to a maximum of Rs 1.5 lakh in a year, either lump-sum or in instalments. Deposits here qualify for a tax deduction of up to Rs 1.5 lakh under section 80C of the Income Tax Act. The account also offers a loan/withdrawal facility that is not available on discontinued accounts. The interest rates are compounded annually.

The tenure is 15 years for this account. However, a subscriber can take 1 withdrawal during a financial after five years excluding the year of account opening. Similarly, premature closure of the account can also be done after 5 years from the end of the year in which the account was opened.

3. Senior Citizen Savings Scheme (SCSS):

Senior citizens will continue to earn 8.2% per annum from their SCSS account. The interest rates here are paid from the date of deposit to 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 1st April, 1st July, 1st October and 1st January. This account can be opened with a minimum of Rs 1,000 to a maximum of Rs 30 lakh. The scheme is broadly meant for individuals above the age group of 60 years.

Notably, interest is taxable if total interest in all SCSS accounts exceeds Rs 50,000/- in a financial year and TDS at the prescribed rate shall be deducted from the total interest paid. No TDS will be deducted if form 15 G/15H is submitted and accrued interest is not above the prescribed limit.

4. ​Sukanya Samriddhi Account(SSA):

This small saving scheme which is meant for girl children, will continue to offer an 8% rate during Q3 of FY24. This account can be opened for a maximum of two girls in a family. Provided in case of twins/triplets girls birth more than two accounts can be opened. Guardians can open an account for a girl child below the age of 10 years. A minimum of Rs 250 to a maximum of Rs 1.5 lakh in a financial year is allowed in this account. Deposit can be made a maximum of up to the completion of 15 years from the date of opening. In this account, interest shall be credited to the account at the end of each Financial year.

Sukanya Samriddhi offers exponential tax benenfits. Firstly, it offers tax exemption of up to Rs 1.5 lakh under section 80C, also the interest earned in this scheme is free under the Income Tax Act.

5. Kisan Vikas Patra (KVP):

Kisan Vikas Patra is a small savings instrument that will facilitate people to invest in a long-term savings plan. It is a popular investment instrument given that is low-risk and also guarantees assured returns.

The scheme will continue to offer a 7.5% interest rate during the October to December 2023 quarter, which is compounded annually. As per India Post, the amount invested in KVP doubles in 115 months (9 years & 7 months). The account can be opened with a minimum of Rs 1,000, however, it has no maximum limit.

Other small saving schemes interest rates in Q3 of FY24:

From October 1, 2023, to December 31, 2023, the saving deposit scheme will continue to offer 4%, while the monthly income account scheme will offer 7.4%, and the National Savings Certificate (NSC) will offer 7.7%.

Also, the 1-year Time Deposit will offer 6.9%, while the 2-year and 3-year tenure time deposits will offer 7% each, and lastly, the 5-year time deposit scheme will offer 7.5% in Q3 of FY24.