Small Savings Schemes Vs Bank FD: Which One Is Offering Better Returns? PPF, NSC, SSY Latest Interest Rates

Small Savings Schemes Vs Bank FD: As the government hiked interest rates on 3-year time deposits and the Sukanya Samriddhi Scheme, the annual return rates of small savings schemes have increased. These fixed-income schemes are compared with bank FD (fixed deposits). Recently, SBI and Bank of Baroda have also raised their FD interest rates. Here are the latest interest rates on small savings schemes and bank fixed deposits.

The interest rate on PPF stands at 7.1 per cent, that on NSC at 7.7 per cent, and Senior Citizen Savings Scheme at 8.2 per cent.

Latest Interest Rates On Small Savings Schemes:

The interest rates for the January-March 2024 quarter have been fixed as follows:

Savings Deposit: 4 per cent

1-Year Post Office Time Deposits: 6.9 per cent

2-Year Post Office Time Deposits: 7.0 per cent

3-Year Post Office Time Deposits: 7.1 per cent

5-Year Post Office Time Deposits: 7.5 per cent

5-Year Recurring Deposits: 6.7 per cent

National Saving Certificates (NSC): 7.7 per cent

Kisan Vikas Patra: 7.5 per cent (will mature in 115 months)

Public Provident Fund: 7.1 per cent

Sukanya Samriddhi Account: 8.2 per cent

Senior Citizens Savings Scheme: 8.2 per cent

Monthly Income Account: 7.4 per cent.

Small Savings Schemes Vs Bank FD

Bank fixed deposits are time deposits wherein depositors keep their money for a fixed time, let’s say, 6 months, 1 year, 3 years or 5 years. The bank offers fixed annual interest rates on this fixed deposit, and the rates vary based on FD tenure and the depositor’s age.

Currently, HDFC Bank is offering up to 7.75 per cent interest rates on FD, depending upon deposit tenure and depositor’s age. ICICI Bank is offering FD rates up to 7.60 per cent annually and SBI is giving up to 7.50 per cent a year.

What Are Small Savings Schemes?

These are savings instruments managed by the government to encourage citizens to save regularly. Small savings schemes have three categories — savings deposits, social security schemes and monthly income plan.

Saving deposits include 1-3-year time deposits and 5-year recurring deposits. These also include saving certificates such as National Saving Certificates (NSC) and Kisan Vikas Patra (KVP). Social security schemes include Public Provident Fund (PPF), Sukanya Samriddhi Account and Senior Citizens Savings Scheme. The monthly income plan includes the Monthly Income Account.

The interest rates on small savings schemes, including public provident fund (PPF), national savings certificate (NSC) and Kisan Vikas Patra (KVP), are reviewed every quarter.

Interest rates on small savings schemes like PPF, NSC, etc, are now market-linked and moves in tandem with 10-year G-Sec yield.