From SCSS, NSS to Post Office Time Deposit Scheme: Government schemes offering more interest than bank FDs

Government Schemes: High-interest options beat bank FDs for better returns.

Updated : May 31, 2023, 07:07 AM IST | Edited by : Raunak Jain

From SCSS, NSS to Post Office Time Deposit Scheme: Government schemes offering more interest than bank FDs

Government Schemes: In the face of mounting inflationary pressures, the Reserve Bank has resorted to multiple interest rate hikes over the past year. This scenario has prompted numerous banks to offer lucrative interest rates on fixed deposit (FD) schemes to entice customers. However, even with such offerings, a plethora of government schemes continue to provide higher interest rates compared to bank FDs. By investing in these post office schemes, individuals not only benefit from government security and tax exemption but also enjoy enhanced returns. Today, we present information on some such government schemes that enable investors to leverage higher interest rates surpassing those offered by banks' fixed deposit schemes. Let's delve into the details of these schemes.

These government schemes boast elevated interest rates, ensuring attractive returns on investments:

Sukanya Samriddhi Yojana: Aimed at alleviating concerns related to the education and marriage of girl children, the government has introduced the Sukanya Samriddhi Yojana. This scheme grants an impressive 8 percent annual interest rate on deposited amounts. Individuals can open an account for a girl child aged up to 10 years. Deposits ranging from Rs 250 to Rs 1.5 lakh per annum are permissible under this scheme. Furthermore, deposits made under this scheme qualify for exemption under Section 80C of the Income Tax Act.

Senior Citizen Savings Scheme: Specifically tailored for senior citizens, the Senior Citizen Savings Scheme has garnered significant popularity. Individuals aged 60 years or above can open an account at the post office and benefit from a robust 8.2 percent interest rate on their deposits. Notably, this rate surpasses the interest rates typically offered by bank FD schemes.

National Savings Scheme: The National Savings Scheme presents investors with a compelling interest rate of 7.7 percent. Minimum investments of Rs 100 and maximum investments of Rs 1.5 lakh are permitted under this scheme. Additionally, investments made under this scheme qualify for a deduction of Rs 1.5 lakh under section 80C of the Income Tax Act.

Post Office Time Deposit Scheme: Analogous to banks, post offices also extend the facility of fixed deposit schemes. Investors can allocate funds for durations of 1 year, 2 years, 3 years, or 5 years. Notably, the post office offers a noteworthy 7.5 percent interest rate on the 5-year time deposit.

Interest rates offered on FD schemes by leading banks:

• State Bank of India (SBI): Ordinary citizens can secure interest rates ranging from 3.00 percent to 7.10 percent on SBI's FD scheme.

• ICICI Bank: General customers of ICICI Bank can avail interest rates ranging from 3.00 percent to 7.1 percent on their FD scheme.

• Axis Bank: General customers of Axis Bank can access interest rates spanning from 3.5 percent to 7.1 percent.

• HDFC Bank: HDFC Bank extends interest rates between 3.00 percent and 7.1 percent to its customers.

• Punjab National Bank (PNB): PNB offers interest rates ranging from 3.5 percent to 7.25 percent to its general customers.

By capitalizing on the enticing interest rates provided by these government schemes, investors can optimize their returns while enjoying the security and tax benefits associated with them.