From the beginning of this month, investment in the Senior Citizen Savings Scheme (SCSS) – one of the nine government-run small savings schemes – fetches a lower return of 7.4 per cent, compared to 8.6 per cent in the quarter ended March 31. The SCSS scheme, which pays interest at the end of each of the four quarters, allows investment to the tune of Rs 1,000 to Rs 15 lakh for a maturity period of five years, according to India Post’s website – indiapost.gov.in. For the first quarter of financial year 2020-21, the government has lowered interest rates on most small savings schemes such as the SCSS by 80-140 basis points (0.8-1.4 percentage point), according to an official statement.
Here are the interest rates applicable to other small savings schemes:
|Instrument||Interest Rate In January-March||Interest Rate In April-June||Compounding Frequency|
|One-Year Time Deposit||6.9%||5.5%||Quarterly|
|Two-Year Time Deposit||6.9%||5.5%||Quarterly|
|Three-Year Time Deposit||6.9%||5.5%||Quarterly|
|Five-Year Time Deposit||7.7%||6.7%||Quarterly|
|Five-Year Recurring Deposit||7.2%||5.8%||Quarterly|
|Monthly Income Account||7.6%||6.6%||Monthly and paid|
|National Savings Certificate||7.9%||6.8%||Annually|
|Public Provident Fund||7.9%||7.1%||Annually|
|Kisan Vikas Patra||7.9% (matures in 113 months)||6.9% (matures in 124 months)||Annually|
|Sukanya Samriddhi Account||8.4%||7.6%||Annually|
Currently, the Ministry of Finance offers nine types of small saving schemes, including the 15-Year Public Provident Fund (PPF) and Sukanya Samriddhi scheme, and revises the interest rates applicable to them on a quarterly basis.