How Much You Earn From Govt Savings Scheme?

The government offers various savings schemes through financial institutions across the country. Each scheme has its own rules, such as how long you need to invest, who can invest, how much you can deposit and the interest rates.
Interest rates for popular schemes like the Public Provident Fund (PPF), post office savings, fixed deposits, National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY) are reviewed and adjusted every three months.
These schemes are designed to meet the needs of different groups. Some are specifically for senior citizens, others support women's welfare and there are special schemes for farmers and salaried individuals.

Here are the latest July-September 2024 interest rates for government-backed savings schemes available at post offices nationwide:

Public Provident Fund Scheme

A Public Provident Fund (PPF) account allows you to deposit between ₹500 to ₹1,50,000 per year. You can take loans starting from the third year up to the sixth year after opening the account. Withdrawals are allowed every year from the seventh year onwards. The account matures after completing fifteen full financial years from the year it was opened.

After maturity, you can extend the account for blocks of 5 years with additional deposits. Alternatively, you can keep the account open indefinitely without further deposits, earning interest at the prevailing rate.

The amount in your PPF account cannot be seized under any court order. Deposits made in the Public Provident Fund qualify for tax deductions under Section 80C of the Income Tax Act. Moreover, the interest earned on the account is tax free under Section 10 of the Income Tax Act. Currently, PPF interest rate is 7.1%.

Sukanya Samriddhi Account

Sukanya Samriddhi Account is a specialized savings scheme designed for the welfare of girl children. It allows opening an account in her name before she reaches 10 years of age. Deposits can range from a minimum of ₹250 to a maximum of ₹1.5 lakhs per year, and each girl child can have only one account opened for her.

You can open this account at post offices or authorized banks. The money deposited in this account can be used for the girl's education expenses. If she wishes to use the funds for higher education, withdrawals are allowed.

The account matures after 21 years from the date of opening which means it becomes fully accessible to the girl when she turns 21. Additionally, deposits made into these accounts are eligible for tax deductions under Section 80C of the Income Tax Act.

The interest earned on this account is also tax free under Section 10 of the Income Tax Act. If the girl gets married after turning 18, the account can be closed prematurely.

Overall, it's a savings scheme designed to financially support the education and future of a girl child in India. From July 1 to September 30, 2024, Sukanya Samriddhi Account will earn an interest rate of 8.20% per annum.

Senior Citizens Savings Scheme

Senior Citizens Savings Scheme (SCSS) is designed for individuals aged 60 years or above and those aged 55 to 59 who have retired under specific schemes like Superannuation, VRS or Special VRS. Retired Defence personnel can also open accounts from the age of 50, subject to certain conditions. To open an account, you need to deposit a minimum of ₹1,000 in multiples thereof, up to a maximum of ₹30 lakhs.

Interest begins accruing from the date of deposit and is paid quarterly on the 1st working day of April, July, October and January. As of July 01 to September 30, 2024, the interest rate stands at 8.20% per annum. The account matures after 5 years from the date of opening with an option to extend for another 3 years. Premature closure is allowed under specific circumstances. Deposits in the SCSS qualify for deduction under Section 80C of the Income Tax Act, providing tax benefits to depositors.

National Savings Scheme

You can invest minimum of ₹1,000, in multiples of that amount up to ₹9 lakh in a single account or ₹15 lakh in a joint account.

If needed, you can have more than one account as long as the total amount across all accounts doesn't exceed the maximum limits.

You have the option to close the account early after one year but before three years with a deduction of 2% of the deposit. After three years the deduction reduces to 1% of the deposit.

Currently, the interest rate for this scheme is 7.4% per annum, applicable from July 1 to September 30, 2024.

Post Office Saving Account

This scheme allows you to open an account with a minimum deposit of ₹500 and there's no limit on how much you can deposit. You can open the account by yourself or jointly with another adult. If you're opening it for a minor, even a child as young as 10 years old can have their own account.

The account earns an interest rate of 4% and the interest you earn up to ₹10,000 in a year can be deducted from your taxable income under the Income Tax Act. It's a good way to save and get some tax benefits too.

Final Words

Interest rates for post office savings, senior citizens saving schemes (SCSS) and public provident fund (PPF) will stay the same from July 1st, 2024, for the next three months. Usually, these rates are reviewed every quarter by the government. For the first quarter of the fiscal year FY25 (July-September 2024) government has decided not to change the rates from the previous quarter.