Bad news for the fixed-income investors again. The government has cut the interest rates on post office small savings schemes for the three months ending June 30, 2021. Based on government yields, the government sets the interest rates on post office schemes for the next three months at the start of every quarter of the financial year. The interest rate on PPF will be 6.4 percent instead of 7.1 percent per annum, while for the Senior Citizen Savings Scheme, the interest rate has been fixed at 6.5 percent instead of 7.4 percent per annum. The 5-year Monthly Income Account Scheme will offer 5.7 percent instead of 6.6 percent payable monthly. On the 1-year time deposit, the interest rate stands at 4.4 percent, while on the 5-year warranty, the rate will remain at 5.8 percent per annum.
The most significant cut is on the 1-year deposit, where the new rate is now lower by 1.1 percent. The interest rate on the post office savings account has also been cut from 4 percent to 3.5 percent. The 5-year RD scheme will get 5.3 percent, while Sukanya Samriddhi Yojana will offer 6.9 percent per annum. The money in KVP will now double in 138 months ( 6.2 percent) instead of the earlier tenure of 124 months (6.9 percent). Based on government yields, the government sets the interest rates on post office schemes for the next three months at the start of every quarter of the financial year. If there is a change, it does not impact all the post office schemes; for the investor who invests in NSC, KVP, Time Deposits, and Senior Citizens Savings Scheme (SCSS), the interest rate remains fixed until maturity. However, investors of PPF and Sukanya Samriddhi Yojana (SSY) see a revision in the rate when the government revises the speed at each quarter of any financial year.
Several post office schemes are the first choice of investors looking for fixed and assured income. Some also come with tax benefits under Section 80C of the I-T Act. All of them are sovereign-backed investments wherein the principal is invested, and the interest is ehe tax liability of the claim you will earn on PO schemes, as some may have a taxable interest. Likewise, most also come with tax benefits under Section 80C of the I-T Act. Hem has a long duration; ensure liquid assets are available before locking funds for the long haul. Put funds into them by connecting to your long-term requirements and keeping asset allocation across equity and debt into consideration.
Significantly, the post office schemes carry a sovereign assurance on the sum contributed and hence have the highest safety on the entire principal invested. Get live Stock Prices from the BSE, NSE, and US Market, and the latest NAV and portfolio of Mutual Funds; checkout the latest IPO News, Best Performing IPOs; calculate your tax by Income using an aaTax Calculator; know the market’s Top Gainers, TopLosers & Best Equity Funds like us on Facebook and follow us on Twitter.
