During the June quarter, for which rates were notified by the finance ministry, NSC will see the steepest increase of 70 basis points (100bps=1 percentage point), with five-year term deposits in post offices fetching 7.5%, slightly higher than the peak rate of 7.1% offered by SBI to its customers who are aged less than 60 and park their funds for 400 days. Senior citizens can earn an additional 50 basis points, making FDs with SBI more attractive. The return is lower than the 8.15% proposed by the Employees Provident Fund for its subscribers for 2022-23.
Govt doubles investment cap for SCSS
The retirement savings agency is several months away from deciding the rate for next year.
Among the small savings schemes, the Senior Citizen Savings Scheme offers the highest return of 8.2%, followed by Sukanya Samriddhi, focused on the girl child, at 8%. From the next financial year, the government has also doubled the investment cap for SCSS to Rs 30 lakh annually, which has a tenure of five years and comes with tax benefit for investments of up to Rs 1.5 lakh annually. Super seniors, or those above 80 years, get additional tax breaks. The Centre on Friday also notified doubling of the investment ceiling for the monthly income scheme to Rs 9 lakh annually.
For women, it has offered a new two-year instrument, the Mahila Samman Savings Certificate, which will enable them to invest up to Rs 2 lakh and earn 7.5% annually.
The government makes quarterly adjustment to small savings rates to align them with market rates.
Over the last 10 months, RBI has increased key policy rates by 2.5 percentage points to tame inflation.
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