For those eyeing the Sukanya Samriddhi Yojana as an investment avenue, here’s a noteworthy update: the Narendra Modi-led government has recently increased the scheme’s interest rates by 20 basis points, taking it to 8.2%. This upward revision applies to deposits made under the scheme, offering a more attractive return of 8.2% compared to the previous 8%.
Sukanya Samriddhi Yojana Interest Rate Revisions
The recent announcement not only impacted the Sukanya Samriddhi Yojana but also elevated the interest rate for the 3-year Term Deposit, now set at 7.1% for the January-March 2024 quarter. However, the rates for other schemes have remained unchanged, maintaining their previous levels.
Sukanya Samriddhi Yojana Updated Rates and Comparison
This revision nudges the Sukanya Samriddhi Scheme from an 8% interest rate to the current 8.2%, while the 3-year Term Deposit moves from 7.1% to the same rate for the last quarter of the fiscal year.
Persistence of PPF Rates and Scheme Variants
In contrast, the rates for the Public Provident Fund (PPF) have remained unaltered for over three years. The last adjustment occurred in April-June 2020 when it experienced a reduction from 7.9% to 7.1%.
Overview of Small Savings Schemes
The spectrum of small savings schemes encompasses three main categories: savings deposits, social security schemes, and monthly income plans. These government-backed schemes often present interest rates on par with term deposits offered by banks, making them appealing options for savers.
Tax Benefits and Revised Rates
Small savings schemes carry the added advantage of aiding individuals in saving on income tax. Under Section 80C of the Income Tax Act, investors can claim deductions up to Rs 1.5 lakh annually from their taxable income by investing in schemes like PPF, SCSS, NSC, SSY, and the 5-Year Post Office Time Deposit Scheme.
Quarterly Interest Rate Updates
It’s essential to note that the interest rates for these schemes undergo quarterly revisions. The adjustments are determined by the market rate for the 10-year government security, following a formula formulated by a committee chaired by former Reserve Bank of India Governor Shyamala Gopinath.
Government Assurance on Rates
Previously, the NDA government highlighted that the interest rates offered by various Small Savings Schemes surpass those of fixed deposit schemes provided by both public and private banks.
The recent hike in the Sukanya Samriddhi Scheme’s interest rate presents a lucrative opportunity for investors, potentially boosting the scheme’s appeal among those seeking secure and rewarding investment avenues.