The decision to cut interest rate on savings schemes has been withdrawn for the time being, but one thing is certain from the fact that it is possible to announce it again at the end of the assembly elections. On March 31, the Finance Ministry announced a reduction in interest rate for all term deposits, including PPF, National Savings Certificate, Kisan Vikas Patra, Sukanya Samriddhi. However, it was withdrawn on the morning of 1 April. In this article, you will tell where it will be most beneficial for the investors to invest in these and what is the interest rate currently available on these schemes.
In how many days your investment will double, it depends on how much the interest rate is. For this, Rule 72 is a very effective formula. 72 has to be divided by the interest rate and the result that will come, your investment will be doubled in that number of years. The Senior Citizen Savings Scheme (SCSS) has an interest rate of 7.4 per cent for the June quarter. There is a calculation of interest on quarterly basis and payment is also made. By investing in it, your investment will double in 9.72 years.
The interest rate for the National Savings Certificate is 6.8 percent. Interest is calculated on an annual basis. It will double in 10.58 years. Investment can be started in National Savings Certificate from minimum 1000 rupees and there is no maximum investment limit. This scheme is available only from the post office and investment in it is tax rebate under Section 80C of Income Tax Act.
The interest rate on public provident fund is 7.1 percent. It will double in 10.14 years. In this, a minimum of 500 rupees and maximum of 1.5 lakh rupees can be deposited in a financial year. You get the benefit of deduction by investing. Interest income and maturity income are completely tax free if you invest in PPF.
The interest rate for Kisan Vikas Patra is 6.9 percent. This doubles your investment in 124 months, meaning in 10.43 years. Kisan Vikas Patra was launched by the Post Office in 1988. This saving scheme was launched so that people can invest for long term. It calculates interest on an annual basis. At least 1000 rupees can be invested in this scheme. Talking about tax rules (Kisan Vikas Patra tax rules), tax deduction does not benefit if you invest in it. It is not covered under section 80C. Talk about the rules related to tax on earnings. Income with interest is taxed. It is included in your total income and according to the tax slab you come in, you will have to pay tax. 10% of the total interest income is deducted as TDS. TDS is not deducted on withdrawals after maturity period.