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Latest Interest Rates on PPF, Sukanya Samriddhi and Post Office Savings Deposits Research Team | Posted On Monday, July 15,2019, 02:33 PM

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Latest Interest Rates on PPF, Sukanya Samriddhi and Post Office Savings Deposits



If you invest in PPF, National Savings Certificates and some other small saving schemes like post office deposit schemes, expect lower returns. The Government has lowered the interest rate on PPF and NSC by 10 basis points or 0.1%.

The interest rates of small saving schemes depend on government bond yields of similar maturity. Sadly, during the April-June quarter, the 10-year G-Sec yield fell by about 40 basis points.

Small saving schemes like SCSS, Post Office deposit schemes and NSC are popular investments in India, with senior citizens too investing heavily in them. In spite of the cut in interest rates of small saving schemes, many citizens prefer them over FDs. The returns are considerably higher than FDs.

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Latest Interest Rates on PPF, Sukanya Samriddhi and Post Office Savings Deposits

Invest in Small Savings Schemes:

The small savings schemes like PPF and NSC offer higher interest rate than FDs. A five year NSC offers 7.9%, while a term deposit of amount less than Rs 2 Crores with 5 year maturity, offers 6.5-7%. (Slightly higher for senior citizens).

The small savings schemes including the highly popular PPF enjoyed a sharp hike in the October-December quarter. They have remained steady ever since.


Interest (%)

Minimum Ivt.

Maximum Ivt.


Tax Benefits

Senior Citizen’s Savings Scheme



15 Lakhs

5 – Year Tenure, Minimum age 60


Sukanya Samriddhi Yojana



1.50 lakhs

One Account per girl child


Oublic Provident Fund



1.50 lakhs P.A

15-Year tenure, tax-Free returns


5-Year NSC Viii Issue



No Limit



Time Deposit



No Limit

Available in 1,2,3,5 Years


Post Office Monthly Income Scheme



Single 4.5 lakhs/ Joint 9 lakhs

5-Year Tenure, Monthly returns / 5-Year Tenure, Monthly returns


Kisan Vikas patra



No Limit

Can be encashed after 2.5 years


Recurring Deposits



No Limit

5-Year tenure


Savings Account



No Limit

10,000 Interest tax free


See Also: Benefits of Sukanya Samriddhi Yojana for Girl Child by the Govt of India

Interest rates and bond yields have been slowly moving downwards, after accommodative polices of global central banks. However, the Governments hands are tied, and small saving scheme rates cannot be cut by too much. This is a sensitive subject and no Government likes to meddle with small savings scheme rates.

Small Savings Scheme Rates:

Small Saving Schemes for Social Objectives:

The Government runs small saving schemes to meet social objectives like improving the quality of life of senior citizens and girl child in India. So, these schemes like SCSS and Sukanya Samriddhi Scheme continue to offer higher interest rates than NSC and the KVP.

Senior citizens need income in retirement. SCSS offers regular income and with the higher interest rate of 8.4% a year, remains an excellent investment. The Government wants to protect the interests of the girl child in India. Invest in the Sukanya Samriddhi Scheme which offers 8.4% a year for higher education and marriage of your daughter. SCSS and Sukanya Samriddhi Scheme offers Section 80C tax benefits up to Rs 1.5 Lakhs a year.

See Also: Sukanya Samriddhi Yojana Account - Eligibility, Tax Benefits and Rules

Why Small Saving Scheme Rates are Going Down?

You have the recommendations of the Shyamala Gopinath panel, where interest rates are reviewed before the end of each quarter and new rates are announced for the next quarter. This helps bring interest in-line with government bond rates of similar maturities with a certain spread added.

The spread is highest for senior citizen schemes. The yield on 10-year government bonds is going down and so small saving scheme rates are also being revised.

Small saving schemes are popular with the salaried class, because of the tax benefits. PPF and Sukanya Samriddhi Scheme enjoy EEE benefits.

See Also: Save tax using the Sukanya Samriddhi Yojana

The Rule of 72 and Compound Interest:

You have the rule of 72 which shows how fast your investment doubles. All you have to do is divide 72 by the annual rate of return to get a rough estimate on how many years it takes for the initial investment to double.

Let’s Take the Example of KVP:

The interest rate of KVP for the April 1st to June 30th quarter was 7.7%. Following the rule of 72 we have:   72 / 7.7 = 9.4.

Your money will double in 9 years and 4 months.

Now, interest rate of KVP for the July 1st to September 30th was 7.6%. Your money will now double in 9 years and 5 months.

See Also: How To Avail Loan Against Sukanya Samriddhi Yojana?

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