In a recent development, the central government has eased the regulations governing various small savings schemes, encompassing popular options like the Public Provident Fund (PPF) and the Senior Citizen’s Savings Scheme (SCSS). The modifications, detailed in a gazette notification dated November 9, are aimed at enhancing flexibility and accessibility for investors.
As of now, the central government offers a total of nine small savings schemes, each distinguished by its unique features, tenures, and interest rates. The changes to these schemes, instituted by the Department of Economic Affairs, Ministry of Finance, were officially announced on November 7.
The nine small savings schemes include the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, Senior Citizen’s Savings Scheme (SCSS), Post Office Monthly Income Scheme (POMIS), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Post Office Time Deposit (POTD), Atal Pension Yojana (APY), and Pradhan Mantri Vaya Vandana Yojana (PMVVY).
One significant amendment pertains to the Senior Citizen’s Savings Scheme, extending the timeframe for opening an account from one month to three months. As per the gazette notification, individuals can now open an account within three months from the date of receiving retirement benefits and proof of the disbursal date of such benefits.
In the case of the Public Provident Fund (PPF), the notification introduces changes regarding the premature closure of accounts. The amendment, titled the Public Provident Fund (Amendment) Scheme, 2023, outlines the revised rules for account closures.
Additionally, the notification addresses the National Savings Time Deposit Scheme, specifying that if a five-year account is prematurely withdrawn after four years from the date of opening, the applicable interest rate would align with that of a Post Office Savings Account.
The interest rates for small savings schemes for the October-December 2023 period are as follows:
PPF: 7.1%
SCSS: 8.2%
Sukanya Yojana: 8.0%
NSC: 7.7%
PO-Monthly Income Scheme: 7.4%
Kisan Vikas Patra: 7.5%
1-Year Deposit: 6.9%
2-Year Deposit: 7.0%
3-Year Deposit: 7.0%
5-Year Deposit: 7.5%
5-Year RD: 6.7%
Moreover, certain small savings schemes offer tax benefits, with deductions under various sections of the Income Tax (I-T) Act. Notably, schemes like SCSS and PPF qualify for benefits under Section 80C of the I-T Act, with deductions going up to Rs 1.5 lakh.
These revisions aim to provide investors with increased flexibility and additional benefits while participating in small savings schemes.
Also Read: Financial Regulation Update: Indonesia Set To Cap Fintech Loan Interest Rates
