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Interest Rates On Small Savings Schemes Unchanged For Apr-Jun 2018

After slashing the interest rates on various Small Savings Schemes by 0.20% in the previous quarter Jan-Mar 2018, the Ministry of Finance has decided to maintain the same rates for the next quarter Apr-Jun 2018.

This announcement was made by the Department of Economic Affairs, Ministry of Finance vide its Office Memorandum — Revision of interest rates for Small Savings Schemes — dated Mar 28, 2018.

Earlier, the interest rates were cut by 0.10% back-to-back during Apr-Jun 2017 and Jul-Sept 2017 quarters, followed by a pause for the period Oct-Dec 2017.

Accordingly, the interest rates on various Post Office Small Savings Schemes for Quarter-1 2018-19 — i.e. Apr 1st to Jun 30th, 2018 — are detailed below:

Public Provident Fund (PPF) : 7.6% p.a. [compounded annually]

5-year National Saving Certificate (NSC) : 7.6% p.a. [compounded annually]

Monthly Income Scheme : 7.3% p.a. [monthly compounding and paid out]

Senior Citizens Savings Scheme : 8.3% p.a. [quarterly compounding and paid out]

Time Deposits
1-year Deposit : 6.6% p.a.
2-year Deposit : 6.7% p.a.
3-year Deposit : 6.9% p.a.
5-year Deposit : 7.4% p.a.
(All on quarterly compounding basis)

5-year Recurring Deposit : 6.9% p.a. [compounded quarterly]

Kisan Vikas Patra : 7.3% p.a. [compounded annually] 
(The scheme will double your money in 118 months)

Sukanya Samriddhi Scheme : 8.1% p.a. [compounded annually]

Savings Deposit : 4% p.a. [compounded annually]

Don't miss reading my earlier blog post on this subject — Bad News For Investors In Post Office Small Savings Schemes — for some very insightful and useful comments.

small-saving-schemes-changes

Meanwhile, in addition to the aforesaid announcement, the Ministry of Finance has made a couple of other announcements too with regards to the Post Office Small Saving Schemes.

A. Payment of interest and maturity value through the Savings Account.
In Aug 2017, the Department of Economic Affairs, Ministry of Finance had stipulated that "interest and maturity proceeds of Small Savings Instruments operated by Department of Posts shall be credited in Basic Savings Account opened in Post Office".

The depositors had, however, complained against this idea of having another Savings Account.

Hence, the Department has vide its Office Memorandum — Payment of interest and maturity value of Small Savings Instruments through Savings Account — dated Mar 23, 2018, withdrawn the said provision.

Accordingly, the interest and maturity proceeds of Small Savings Schemes will be paid to the depositors through any of the following modes:
- Depositor's Savings Account standing at Post Office
- Depositor's Savings Account standing at any Commercial Bank
- Cheque
- Cash

B. Aadhaar for Small Savings Schemes
The depositors are required to submit their Aadhaar number at the time of opening of account / purchasing certificates under various Small Savings Schemes.

Earlier, the last date to do so was Mar 31, 2018.

However, the Department has vide its Office Memorandum — Inclusion of Aadhaar in respect of Small Savings Schemes — dated Mar 27, 2018, extended the last date for submission of 'Aadhaar' number until further orders.

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