Post office time deposits rate hiked, PPF still remains attractive
With the beginning of the New Year 2019, the good news has knocked the door of the public interested to invest in Post Office saving schemes.
The interst rate on time deposits issued by Post Office has been increased by 10 basis points (bps) from January – March 2019. According to a circluar issued by Ministry of Finance, interest rates of other small saving schemes issused by Post Office including Public Provident Fund (PPF), Kisan Vikas Patra (KVP), Recurring Deposit (RD), etc. have been kept unchanged.
Post Office revised interest rates
The one year Post Office term deposit will now fetch 7 per cent, increased from 6.9% in the previous quarter. While the interest rates on term issued of three years have been reduced by 20 bps to 7 per cent. Interest rates on two year and five-year deposit rates have been kept unchanged at 7 per cent and 7.8 per cent, respectively. Mentioned below are the interest rates on small savings scheme for the quarter ending March 31, 2019.
The interest rates on other Post Office saving schemes such as Senior Citizen Savings Scheme (SCSS) will continue to fetch 8.7 per cent. The interest rates were revised in the previous quarter up to 40 bps on various small saving schemes. The interest rates have been benchmarked to the yields of the government bonds of the same maturity.
To invest in the Post Office saving scheme, the customer has to visit the nearby branch of the Post Office, just like every other fixed deposit. The time deposits can also be transferred from one Post Office to another. The csutomer can extend the time deposit on maturity or redeem it, whenever needed. The time deposit not only money into your kitty, but allows tax deduction under section 80C of Income Tax Act.
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