Now, we know that interest rates of small / post-office savings schemes are bound to get revised every year. The new rates (can be higher, lower or same) will remain applicable from 1st April every year. So if you invest in SCSS, PO MIS, NSC or PPF 1st April, 2013 onwards, the new rates will be applicable, which are lower. ๐
A small note and details of the rate change are mentioned below for your reference:
SCSS or Senior Citizen Savings Scheme: Senior citizens, who are looking forward for a safe parking of fund along with quarterly interest payout, can look upto this option. An individual can invest in SCSS a maximum amount of Rs. 15 lakh. People who will invest in this scheme in the coming financial year (F.Y.) 2013-14 i.e. between the period from 1st April, 2013 to 31st March, 2014, the interest rate that would be applicable is 9.2% p.a. In F.Y. 2012-13 this rate was 9.3%. The term for this deposit is 5 years (no withdrawal is allowed in between) with subject to an extension of 3 years. Interest pay out is taxable.
PO MIS or Monthly Income Scheme: Anyone can invest here. This is considered as a safe and sure way to get regular monthly income. Singly you can invest maximum Rs. 4.5 lakh and jointly you can invest maximum Rs. 9 lakh. Interest is taxable here also. Term is 5 years. Last F.Y. the interest rate was 8.5%. From 1st april, 2013 the new rate will be 8.4%.
NSC or National Savings Certificate: Here there is no maximum limit of investment. Upto 1 lac of investment can be claimed as tax exemption under section 80C. No regular payout is here and term is years. Interest rate from the next F.Y. will be 8.4% p.a., reduced from 8.5% earlier.
PPF or Public Provident Fund: Very popular and for obvious reason – its tax treatment, which is EEE i.e. exempt at the time of investment; interest income is exempt; so on maturity. In a F.Y. maximum amount you can invest is Rs. 1 lakh. Term is 15 years and can be extended thereafter by 5 year blocks. Interest rate from the next F.Y. will be 8.7% p.a., reduced from 8.8% earlier. You can calculate your return and make projection by downloading PPF Calculator under 'Amazing Calculators' section of our site.