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Does PPF, NSC, Sukanya Samridhhi account offer better returns than bank FDs? Check details

Several banks have recently raised their interest rates on term deposits. After the bulls, the FDs are now giving slightly more returns than before. However, small savings plans still offer attractive returns. Small savings schemes, including PPF, Old People’s Savings Scheme, National Savings Certificate and Sukanya Samriddhi Account Scheme currently offer interest rates of up to 7.6 %, while major banks like PNB, SBI and HDFC Banks offer an interest rate of around 6%. percent on the DFs.

What is a small savings plan?

Small savings schemes are savings instruments run by the government to encourage citizens to save regularly. The schemes include post office savings deposits, 1-3 year term deposits and 5 year recurring deposits. These also include savings certificates such as National Savings Certificates and Kisan Vikas Patra.

It also includes Public Provident Fund, Sukanya Samriddhi Account and Senior Citizens Savings Scheme social security schemes. The monthly income account is also covered by the schemes.

Current interest rates on small savings plans

As the interest rates on small savings plans are revised on a quarterly basis, the government had kept them unchanged during the last revision on June 30. The revision occurs based on the evolution of benchmark government bonds of similar maturity.

Post office savings deposits offer an interest rate of 4 percent per annum. Term deposits with terms of 1 to 3 years currently offer 5.5% per annum. Five-year term deposits yield 6.7% per annum. Five-year recurring deposits can earn 5.8% interest per year.

National Savings Certificates and Kisan Vikas Patra offer annual interest rates of 6.8% and 6.9%, respectively.

The public provident fund, the Sukanya Samriddhi account and the savings scheme for the elderly generate annual returns of 7.1%, 7.6% and 7.4%, respectively.

The Monthly Income Account offers an interest rate of 6.6% per annum.

Interest rates should be revised by the end of this month. At the last review at the end of the June 2022 quarter, the government kept interest rates unchanged. “The interest rates of the various small savings plans for the second quarter of the financial year 2022-23, beginning on July 1, 2022 and ending on September 30, 2022, will remain unchanged compared to those notified for the first quarter ( April 1, 2022, to June 30, 2022) for the fiscal year 2022-23,” the Ministry of Finance had said.

Interest rates on FDs

Several banks have revised upwards their interest rate offers on deposits as well as on loans. This comes as interest rates in the country are on the rise, with the RBI’s Monetary Policy Committee (MPC) having raised the key repo rate three times in its last three policy review meetings. .

On fixed deposits below Rs 2 crore, the State Bank of India offers interest rates of between 2.90% and 5.65% for the general public, depending on the tenure of the FD. HDFC Bank offers 2.75% to 6.1%, while PNB offers 3% to 5.75%.

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