A comparative analysis of various investments:
PPF, other small savings schemes interest rates kept unchanged for September quarter.
The Pandemic Virus has taught us at least a few lessons:
- Staying safe and healthy is of paramount importance than anything else in life.
- Misfortunes and loss of income will impact us at any point in time without any advanced clue whatsoever. So Savings for such eventualities is a must.
- Instead of blindly investing, a study or consultation is necessary to save in different modes like Equity shares, MFs etc., apart from traditional Bank and Post office deposits. The former gives much better returns than the latter ones. The Equity shares give on an average rate of over 15 % p.a in the medium and long term and so also MFs whereas the Post office and Bank deposits offer much less and when compared to inflation sometimes it is negative ROI.
- Herein given the rate of interest in Post office deposits as announced by the GOI.
The government on Wednesday kept interest rates on small savings schemes, including PPF, NSC and SCSS unchanged for the second quarter of 2021-22 amid the COVID-19 pandemic.
Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to carry an annual interest rate of 7.1 percent and 6.8 percent, respectively, in the second quarter as well.
“The rates of interest on various small savings schemes for the second quarter of the financial year 2021-22 starting from July 1, 2021, and ending on September 30, 2021, shall remain unchanged from the current rates applicable for the first quarter (April 1, 2021 to June 30, 2021) for FY 2021-22,” the finance ministry said in a notification.
Amid the state assembly elections last quarter, the government after reducing rates on small savings scheme rolled back the rate cut, terming it an “oversight”. With that, the rates of such schemes continued to remain as they were during the January-March quarter.
It must be noted that interest rates for these small savings schemes are notified quarterly. Currently, India Post or Department of Posts, which runs postal services in the country, offers nine types of small saving schemes.
Here’s a look at the existing interest rates of small savings schemes:
| Instrument | Interest rate |
| Savings deposit | 4% |
| 1 year Time Deposit | 5.5% |
| 2 year Time Deposit | 5.5% |
| 3 year Time Deposit | 5.5% |
| 5 year Time Deposit | 6.7% |
| 5-year Recurring Deposit | 5.8% |
| 5-year Senior Citizen Savings Scheme | 7.4% |
| 5-year Monthly Income Account | 6.6% |
| 5-year National Savings Certificate | 6.8% |
| Public Provident Fund | 7.1% |
| Kisan Vikas Patra | 6.9% (will mature in 124 months) |
| Sukanya Samriddhi Yojana | 7.6% |
These schemes carry the least risk among all investment options as they are recognized and validated by the government, according to experts.
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