PPF, Senior Citizen Savings Scheme vs Bank FDs: Which one is offering better returns? Know details

New Delhi: Even while fixed deposits are now yielding slightly higher returns than before, thanks to recent interest rate increases by various banks, small savings programmes continue to offer more appealing rewards. Small savings plans including PPF, senior citizen savings schemes, National Savings Certificates, and Sukanya Samriddhi Account Scheme offer returns ranging from 4% to 8.1 percent, depending on the scheme and the length of time invested.

Small Savings Schemes

Small Savings Schemes are government-managed savings vehicles designed to encourage residents to save consistently. Post office savings accounts, 1-3-year time deposits, and 5-year recurring deposits are among the options. Saving certificates such as National Saving Certificates and Kisan Vikas Patra are also included.

It also includes the Public Provident Fund, Sukanya Samriddhi Account, and Senior Citizens Savings Scheme, which are all social security schemes. The schemes also apply to the Monthly Income Account.

Current Interest Rates

For the April-June quarter, the government kept interest rates on modest savings instruments constant. Interest rates on small savings accounts are reviewed every three months. The change is in line with the movement of similar-maturity benchmark government bonds. The current rates on a variety of small savings instruments are listed below.

The interest rate on savings accounts at the post office is 4% per year. Time deposits with a term of one to three years are currently paying 5.5 percent per year. Time deposits with a five-year maturity offer a 6.7 percent annual return. Interest on five-year recurring deposits can be as high as 5.8% per year.

Annual interest rates of 6.8% and 6.9% are available on National Saving Certificates and Kisan Vikas Patra, respectively.

Annual returns on the Public Provident Fund, Sukanya Samriddhi Account, and Senior Citizens Savings Scheme are 7.1 percent, 7.6 percent, and 7.4 percent, respectively.

In 2015, the Beti Bachao Beti Padhao campaign for a girl child created the Sukanya Samriddhi Account. An account in the name of a girl kid under the age of ten years can be opened. The programme qualifies for a tax deduction under Section 80C of the Internal Revenue Code. The deposit has a 21-year term from the date of opening and can be invested for a maximum of Rs 1.5 lakh each year.

The interest rate on the Monthly Income Account is 6.6 percent per year.

Interest Rates On Fixed Deposits

Fixed deposit interest rates have recently been raised by HDFC Bank, Axis Bank, and Kotak Mahindra Bank for various tenures and amounts of deposits.

HDFC Bank currently offers interest rates on fixed deposits under Rs 2 crore that range from 5.1 to 5.6 percent, depending on the term and borrowers' profile. Various interest rates are offered to various profiles, such as women, older persons, and so on.

Axis Bank currently offers interest rates of 4.45-4.65 percent on deposits of more beyond Rs 2 crore.