Best Investment Options – Small Saving Schemes in India
Small savings schemes in India are offered by the Indian Post Offices across the country which offer safe and it is an attractive investment option. Below are the major small saving schemes and their features.
Post Office Monthly Income Schemes
Interest rate of 8.5% p.a payable monthly
Maturity period is 5 years.
No tax deduction at source (TDS).
No tax rebate is applicable.
National Savings Certificates (NSC)
NSC VIII Issue (5 year) – Interest rate of 8.6% p.a
NSC IX Issue (10 year) – Interest rate of 8.9% p.a.
Minimum investment Rs. 100/-. No maximum limit.
Investment up to Rs 1,00,000/- p.a. qualifies for Income Tax Rebate
Public Provident Fund (PPF)
Interest rate of 8.8% p.a.
Minimum deposit is 500/- p.a.. Max Rs. 1,00,000/- p.a.
Duration 15 years
Investment up to Rs 1,00,000/- p.a. qualifies for Income Tax
Interest is tax-free.
Deposits can be made in lumpsum or in 12 installments but minimum of Rs.500 is mandatory in each financial year
Withdrawal is available from 6th year
Post Office Time deposit scheme
1 year, 2 year, 3 year and 5 year time deposits can be opened. Interest payable annually but compounded quarterly:
Period Rate of Interest
1 year – 8.2%
2 years – 8.3%
3 years – 8.4%
Post Office Savings Account
Rate of interest 4.0% p.a.
Interest is tax Free
Cheque facility is available.
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