Business
FDs are old news! Invest in these government schemes starting at ₹500 per month; earn up to 8.2% interest along with tax benefits..
The government recently announced the interest rates for small savings schemes. However, there were no changes to the rates, and they remain the same as in the previous quarter. Let us examine which of the NSC, PPF, and SSY schemes currently offers the highest interest and where the limitations lie.
**What are the interest rates?**
The central government announces interest rates for small savings schemes every quarter. However, these rates have remained unchanged for quite some time. Currently, the NSC offers 7.7% interest, the PPF offers 7.10% annual interest, and the SSY (a scheme popular for the girl child) offers 8.20% interest.
**What are the benefits of each scheme?**
| Feature | NSC (National Savings Certificate) | PPF (Public Provident Fund) | SSY (Sukanya Samriddhi Yojana) |
| :--- | :--- | :--- | :--- |
| **Who can open an account?** | Any Indian | Any Indian | Parents or guardians of a girl child under 10 years of age |
| **Interest rate?** | 7.7% | 7.1% | 8.2% |
| **Minimum annual deposit?** | ₹1,000 | ₹500 | ₹250 |
| **Maximum annual deposit?** | No limit (but tax exemption applies only up to ₹1.5 lakh) | ₹1.5 lakh | ₹1.5 lakh |
| **Lock-in period?** | 5 years | 15 years (can be extended in blocks of 5 years thereafter) | 21 years or until the girl's marriage (deposits required for only 15 years) |
| **Tax benefits?** | | | | (Section 80C) The deposited amount qualifies for a tax deduction, but the interest earned is taxable Completely tax-free (EEE – meaning tax exemption on the deposit, interest, and maturity proceeds)
Completely tax-free (EEE – meaning tax exemption on the deposit, interest, and maturity proceeds)
Can money be withdrawn prematurely? Not before the completion of 5 years (except for certain critical reasons) Partial withdrawals are allowed starting from the 7th year
Partial withdrawals are allowed only after the daughter turns 18
Who is this best for? For fixed and guaranteed returns over a 5-year period (medium term) For long-term savings or retirement planning
For saving towards a daughter's future (education or marriage)
What is right for you?
If your goal is for a five-year horizon, you can invest in the National Savings Certificate. However, if you wish to save for your daughter's marriage or education, the Sukanya Samriddhi Yojana would be the best choice, as it offers the highest interest rate. Meanwhile, the PPF is also a good option for those looking to invest for a 15-year period.
PC Social Media
