The union government recently decided to keep the interest rate for small savings schemes unchanged for the October-December quarter. Meaning, deposits in schemes such as Public Provident Fund (PPF), Sukanya Samridhi Yojana (SSY), National Savings Certificate and others will continue to attract the same interest rates for the next three-month period.
If you might be thinking of investing fixed returns scheme for a risk-free investment, considering the current volatility in the stock market, let's find out which scheme among NSC, PPF, and SSY is paying the highest interest.
Small Savings Schemes Latest Interest Rates
Currently, NSC offers an interest rate of 7.7 per cent, PPF offers an annual interest rate of 7.10 per cent, and SSY, a savings scheme popularly known as SSY, offers an interest rate of 8.20 per cent.
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Where Will You Get More Returns?
Feature | NSC (National Savings Certificate) | PPF (Public Provident Fund) | SSY (Sukanya Samriddhi Yojana) | |
Eligibility to open an account | Any Indian citizen | Any Indian citizen | Parents or guardians of a girl child below 10 years of age | |
Current Return Rates? | 7.7 per cent | 7.1 per cent | 8.2 per cent | |
Minimum Investment Required? | Rs 1,000 | Rs 500 | Ts 250 | |
Maximum deposited annually? | No limit (however, tax deduction is available only up to ₹1.5 lakh) | ₹1.5 lakh | ₹1.5 lakh | |
Lock-in Period and Maturity? | 5 years | 15 years (can be extended further in blocks of 5 years) | 21 years or until the girl's marriage (deposits are required for only 15 years) | |
What are the tax benefits? (Section 80C) | Deduction available on the deposited amount, but interest earned is taxable. | Completely tax-free (EEE - i.e., deposit, interest, and maturity are all tax-exempt) | Completely tax-free (EEE - i.e., deposit, interest, and maturity are all tax-exempt) | |
Can money be withdrawn prematurely? | Not before completion of 5 years (except under specific emergency conditions) | Partial withdrawals allowed from the 7th year onwards | Partial withdrawal allowed only after the girl child turns 18 | |
Who is this best suited for? | For guaranteed, fixed returns in the medium term (5 years) | For long-term savings or retirement planning | For saving towards a daughter's future (education or marriage) |
Which Scheme You Should Go With?
If you look to park your money for a shorter period, like only five years, you should invest in National Savings Certificates. However, if you want to save money for your daughter's marriage or education, the Sukanya Samriddhi Yojana (SSY) scheme is the best option, as it offers the highest interest rates. PPF is also a good option for those who want to create wealth in the long run.
Disclaimer: This story is for informational purposes only. It should not be considered investment advice.