Latest Post Office Small Saving Schemes Interest Rates of Jul-Sep-2019 Review
Yesterday, Ministry of Finance published latest interest rates on post office small saving schemes applicable for the period July to September, 2019 (2nd Quarter of FY2019-20). Last month, RBI has cut the Repo rate for the 3rd consecutive time and banks started reducing the FD interest rates. This trend has given an indication, that interest rates would go down for small saving schemes too. As expected, Ministry of Finance has reduced the post office small saving scheme interest rates now. What are the latest interest rates on post office small saving schemes for July to September 2019? Which post office small saving scheme offers highest interest rates compared to bank FD’s or other saving schemes? How is the post office interest rate trend looking in the last 8 quarters?
Also Read: Best Term Insurance Plans in India
About announcement of Latest Interest Rates of Post Office Small Saving Schemes for the period July to September-2019
Based on the RBI repo rate cut, many experts were expecting a reduction in interest rates of post office saving schemes. As expected, MoF has reduced the interest rates now. This is bad news to investors who were thinking that interest rates would be constant for the next few quarters.
Small Saving Schemes can be now invested through major banks like ICICI Bank, HDFC Bank and Axis Banks etc.,
What are the changes done in Post Office Interest Rates now for July to Sept 2019?
These new interest rates on post office schemes are from 1st July, 2019 to 30th September, 2019. Here are the key changes.
1) Post Office Term Deposit interest rates are reduced by 0.1% for 1 year to 5 year period. These Term deposit rates are now at 6.9% for 1 to 3 years and 7.7% for 5 years tenure.
2) 5 Year recurring deposit rates rates are reduced from 7.3% to 7.2%.
3) 5 Year Senior Citizen Saving Schemes rates are reduced from 8.7% to 8.6%.
4) 5 Year Monthly Income Account interest rate is reduced from 7.7% to 7.6%.
5) National Saving Certificate (5 Years) interest rates are reduced from 8% to 7.9%.
6) Public Provident Fund (PPF) interest rate is now at 7.9% compared to the previous quarter at 8%.
7) Kisan Vikas Patra Interest rate is reduced from 7.7% to 7.6%.
8) Sukanya Samriddhi Account meant for girl child interest rate is reduced from 8.5% to 8.4%.
Latest Post Office Interest Rates for July to September-2019 – Which scheme gives highest interest?
Here are the details of some of the small saving schemes.
1) Post office small saving schemes are considered as highest safety as these are offered Govt of India (through the Ministry of Finance). Higher interest rates are being offered on Sr. Citizens Saving Scheme, which is 8.6%.
2) Post Office Time deposit (Nothing but FDs) offers 6.9% to 7.7% per annum from 1 to 5 years tenure FDs. Since these FD rates are compounded quarterly, the effective annual interest rates are 7% to 8% per annum. Currently, banks are offering FD rates, which are between 5.5% to 7.5% per annum only. Hence Time Deposits (FDs) from Post office small saving schemes are good compared to bank fixed deposit schemes.
4) There are several NCDs being offered by the corporates where your money can get doubled in 7-9 years time frame. However, these are high risk. Investment in Post Office Kisan Vikas Patra (KVP) would be doubled in 113 months as per new interest rates of Post office schemes. If you want to double your money in banks, you need to deposit for at least over 125 months. Investment in KVP is secured compared to NCDs and offers high interest rates compared to bank FDs. Post Office Fixed Deposit double in 113 months only.
5) The Post Office Small Saving Scheme Monthly Income Account (earlier called as MIS) offers 7.6% per annum interest rates, which is payable every month. You can check Post Office MIS interest rate calculator to know the exact amount you would get. If you are a Senior Citizen, investing in post office monthly income account is one of the best way to get safe monthly income. Alternatively, if can take some risk, you can invest in some of the monthly income plan (MIP) mutual funds that can provide 9% to 11% annualized returns.
6) There are several mutual funds to save money for your kid’s future. However, one unique saving scheme for girl child is Sukanya Samriddhi Account(SSA). You can invest your money in Sukanya Samriddhi Yojana Scheme for your girl child when the girl child is below 9 years. SSA offers 8.4% interest rates. The maturity amount is tax free. This is still a best small saving investment scheme for July to September, 2019 period even though there is reduction of 0.1% now.
7) Public Provident Fund offers interest rate of 7.9% now from July, 2019 onwards. If you and your spouse can plan well, you can become Crorepati by investing in PPF along with getting an income tax benefit u/s 80C in 15-20 years time frame. This is good for low risk investor and for those who are planning to save money for retirement in the next 10-15 years. While the tenure of PPF is for 15 years, it offers safe tax free returns along with tax benefits u/s 80C.
8) If you are planning to save money every month, you can invest in some of the Best SIP Mutual Fund or consider investing in recurring deposits. If you are a low risk investor, you can consider investing in post office recurring deposit that offers up to 7.2% interest rates. You can invest Rs 1,000 per month in a post office RD scheme for 5 years. You can invest a minimum of Rs 10 and in multiples of RS 10 there-off.
9) There are several tax saving investment options in India to save tax u/s 80C. While ELSS Mutual Funds always score high in terms of returns and low lock-in period, it has some element of risk. For moderate to low risk investors, 5 Year National Saving Certificate is one of the best tax saving investment option that offers 7.9% interest rates.
What is Post Office FD Rate in 2019?
These offers Term Deposit and recurring deposit. Let us look at Post Office Fixed Deposit Interest Rates in 2019 now.
1) Post Office FD Rate for 1 year is 6.9%.
2) Post Office FD Rate for 2 year is 6.9%
3) Post Office FD Rate for 3 year is 6.9%
4) Post Office FD Rate for 5 year is 7.7%
5) Post Office Recurrring Deposit Rate for 5 year is 7.2%
If you observe, Post Office FD Rates 2019 are still higher compared to some of the banks like SBI which offers low FD rates. You can check Post Office FD Calculator to get exact yield as these rates are compounded every quarter and the yield would be high.
Latest and Revised Post Office Small Saving Interest rates – July to September-2019
Here is the Post Office Interest Rate Table 2019 (July to Sep period)
How is the trend looking for Small Saving Schemes Interest Rates in the last 8 Quarters?
Post Office FD Interest Rates 2019
Here are some of the features of Post Office FD Schemes and interest rates
1) Post Office FD is offered for 1, 2, 3 and 5 years tenure. You can invest as low as Rs 200 in such FD schemes.
2) The interest rate for 1 to 3 years is 6.9% per annum. However for 5 years tenure Post Office FD it offers 7.7%. If you want to lock your money for 5 years, investing in Post Office FD of 5 years could be better.
3) Post Office RD interest rate 2019 is still high at 7.2% which is for 5 years tenure.
4) The interest is compounded quarterly. Means the yearly interest rates or yield on maturity would be very high.
Post Office FD Rates in 2019 are still good compared to bank FDs or RDs in current scenario.
Conclusion: Post Office Small saving schemes offers the highest returns compared to bank FD schemes. Some of the unique schemes like PPF and Sukanya Samriddhi Yojana Scheme offers highest interest rates. If you are a low risk taker, consider investing in small saving schemes offered by the post office.
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Latest Interest Rates on Post Office Small Saving Schemes – July to September-2019
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