Latest Interest Rate On PPF, NSC, KVP, Sukanya Samriddhi Scheme, Other Small Savings Schemes

Post office small savings schemes like PPF, NSC, KVP, Sukanya Samriddhi Scheme and time deposits will fetch lower interest rate from New Year. The government in its latest revision of small savings scheme rates has cut interest rate by 20 basis points for the January-March period. However, the interest rate in the five-year Senior Citizens Savings Scheme has been retained at 8.3 per cent. Interest on post office savings deposits has also been retained at 4 per cent. Since April 2016, the government has been revising interest rate on small savings scheme on a quarterly basis, as compared to the annual mode earlier. The interest rate on small savings schemes are benchmarked to yields on government bonds, with a small mark-up.

PPF Interest Rate

Investments in PPF will fetch 7.6 per cent interest rate from January 1, 2018, as compared to 7.8 per cent earlier. PPF is one of the most popular long-term savings schemes. It enjoys EEE or exempt, exempt, exempt status in terms of income tax implication - contribution, interest and maturity proceeds all are tax free.

Interest Rate On Small Saving Schemes Effective January 1, 2018                                                                                                            

Instrument	Rate of interest from 01/10/2017 To 31/12/2017 (%)	Rate of Interest from 01/01/2018 to 31/03/2017 (%)	Compounding freqency
Savings Deposit	4	4	annually
1 year time deposit	6.8	6.6	quarterly
2 year time deposit	6.9	6.7	quarterly
3 year time deposit	7.1	6.9	quarterly
5 year time deposit	7.6	7.4	quarterly
5 year recurring deposit	7.1	6.9	quarterly
5 year Senior Citizen Savings Scheme	8.3	8.3	quarterly and paid
5 year monthly income income scheme	7.5	7.3	monthly and paid
5 year National Savings Certificate	7.8	7.6	annually
Public Provident Fund	7.8	7.6	annually
Kisan Vikas Patra	7.5 (will mature in 115 months)	7.3 (will mature in 118 months)	annually
Sukanya Samriddhi Account Scheme	8.3	8.1	annually

(Small savings schemes interest rate from January 1, 2018. Source: Ministry of Finance)

KVP, NSC and Post Office MIS Interest Rate

NSC or National Savings Certificate will fetch a lower annual rate of 7.6 per cent from January 1 while KVP or Kisan Vikas Patra will yield 7.3 per cent and mature in 118 months. Post Office Monthly Income Scheme, which pays interest on a monthly basis, will yield 7.3 per cent as compared to 7.5 per cent earlier. 

Post Office Time Deposit And 5-Year Recurring Deposit Schemes

The interest rate 1-year, 2-year, 3-year and 5-year post office time deposits have been revised lower to 6.6 per cent, 6.7 per cent, 6.9 per cent and 7.4 per cent respectively. The five-year recurring deposit will fetch 6.9 per cent from January 1, as compared to 7.1 per cent earlier.