Latest and Revised Post office Interest Rates for Jul-16 to Sep-16
Last week, the Ministry of Finance announced latest interest rates for post office small saving schemes applicable for the period Jul-2016 to Sep-2016 (2nd Quarter). For the past few years, post office interest rates had minor changes, but investors could not digest high reduction in interest rates in Q1. In this article, I would provide latest updates on post office small saving schemes interest rates, which are effective from 1st July, 2016 to 30th September, 2016 and how you can get maximum out of post office saving schemes.
source site Latest Post office Interest Rates for Jul-16 to Sep-16
While there are no changes in post office interest rates in Jul to Sep quarter compared to Q1, here is the snapshot of interest rates.
1) Though there is reduction in Post office schemes in Q1, I feel some of these schemes are still good even now.
2) None of the other saving schemes would give highest interest rates that come from PPF. PPF is the best option to save income tax as well as to get tax free returns. Though it has maturity of over 15 years, this is considered as one of the best option for retirement savings.
3) It offers highest returns for Sukanya Samriddhi Account Scheme. One can save in their girl child till 14 years of age and post that this scheme would accumulate till girl reaches age of 22 or you can withdraw earlier based on certain conditions.
4) See the compounding and actual annual return column. Some of the schemes are compounded quarterly, means yearly, you would get higher returns compared to interest rates indicated.
5) If you want to double your money, you need to deposit for at least 115 months in the bank. However, in post office KVP, it takes 110 months only. KVP is beneficial compared to bank FD schemes.
6) Post office FD rates are ranging between 7.1% to 7.9%, however they are compounded quarterly. Means the effective annual return is 7.29% to 8.13%. Banks are offering at 6.5% to 7.5% interest rates. Hence, for some of the FD tenures, bank FD interests are better now.
7) Invest part of your savings in post office schemes which are offering higher returns instead of investing in bank FD’s.
8) If you are a retired person, investing in post office monthly income scheme (POMIS) is one of the best way to get safe monthly income.
9) If you are low risk taker and planning to invest money to save tax, NSC is one of the best option to invest.
10) If you are planning to save money every month, you can consider post office recurring deposit which offers upto 7.6% annualized returns.
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