Post office savings schemes: Interest rates on small savings remain unchanged for Jan to Mar 2021

Post office savings schemes: Interest rates on small savings remain unchanged for Jan to Mar 2021

The interest rates on post office savings schemes are revised every quarter by the government on the yield on government bonds.

FPJ Web DeskUpdated: Thursday, December 31, 2020, 01:33 PM IST
article-image
Money |

Bringing cheers to those who put their savings in fixed income investment, the government has decided to keep the interest rate on small savings schemes unchanged for the quarter January to March 2021.

The interest rate on PPF remains at 7.1 per cent per annum while for the Senior Citizen Savings Scheme, the interest rate is 7.4 per cent per annum. The 1-year time deposit, the rate of interest stands at 5.5 per cent.

The interest rates on post office savings schemes are revised every quarter by the government on the yield on government bonds. The government had earlier kept the interest rates on small savings unchanged for the quarter of July to September and October to December 2020.

Experts believe, post office schemes will continue to attract investors over bank deposits as the banks are providing interest of around 6 per cent and less across most tenures.

There is no change in the rate of interest on post office small savings investments such as National Savings Certificates (NSC), Kisan Vikas Patra (KVP), Time-deposits, Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY).

For the investor who invests in NSC, KVP, Time deposits, Senior Citizens Savings Scheme (SCSS), the rate of interest remains fixed until maturity. However, investors of PPF and Sukanya Samriddhi Yojana (SSY) see a revision in the rate as and when the government revises the rate at each quarter of any financial year.

The post office schemes carry a sovereign guarantee on the entire amount invested and are, therefore, considered highly safe. However, before investing, one should make sure about the tax liability of the interest that you will earn on PO schemes. Some of the schemes may have a taxable interest. Invest in them by linking to your long term needs and keeping asset allocation across equity and debt into consideration.

RECENT STORIES

Analysis: Anonymous Electoral Bonds Reined In — But What About Anonymous Cash Donations?

Analysis: Anonymous Electoral Bonds Reined In — But What About Anonymous Cash Donations?

Game-Changing Alliance: Ambani's Reliance Ventures Into Adani's Power For The First Time; Acquires...

Game-Changing Alliance: Ambani's Reliance Ventures Into Adani's Power For The First Time; Acquires...

SRM Contractors IPO Subscribed 86.57 Times On Last Day Of Bidding

SRM Contractors IPO Subscribed 86.57 Times On Last Day Of Bidding

Tax-Saving Tip From Zerodha CEO Nithin Kamath: 'If You're Married And Hindu..."; Here's How To Save...

Tax-Saving Tip From Zerodha CEO Nithin Kamath: 'If You're Married And Hindu...

Holy Cities Like Ayodhya, Varanasi Attracting Big Retail Brands: Report

Holy Cities Like Ayodhya, Varanasi Attracting Big Retail Brands: Report