These schemes are for all categories of people, which provide many benefits ranging from tax benefits to guaranteed returns. More and more people like to invest in these savings schemes. It has many benefits, let us know the benefits of Small Saving Scheme.

1. Guaranteed Returns

Small savings schemes include Public Provident Fund i.e. PPF, Senior Citizen Savings Scheme, Sukanya Samriddhi Yojana etc. All these small saving schemes give guaranteed returns. In this you know that you are going to get this much amount in this time.

2. Financial Independence and Stability

If you have invested in small savings schemes, then it has so much potential that it gives financial independence and stability to yourself and your family. Small savings schemes serve as the foundation of secure, regular income and a strong financial strategy.

3. Income tax exemption

Many small savings schemes provide the benefit of tax exemption. Under Section 80C of Income Tax, you can save up to Rs 1.5 lakh. Schemes like PPF, Senior Citizen Saving Scheme, Time Deposit and FD provide the benefit of tax exemption.

4. Minimum investment

Investors will have to make minimum investment. Depending on the small savings schemes, the amount can range from ₹250 to ₹1,000. You can also invest small amounts in these schemes.

5. Income assurance

In today’s time, people are investing in risky places like share market and mutual funds. Whereas small saving schemes provide assurance of income. With a fixed interest, you know in advance how much amount you will get on maturity. Meaning you will be guaranteed to get income in the future.

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Guaranteed returns are available in these schemes. If you do not have a large amount to invest at once, then you can also invest monthly savings every month. Yes, you can invest a fixed amount every month in Post Office Recurring Deposit. The government had recently revised the interest rates on post office RD. From October 1, 2023 to December 31, 2023, 5 year post office RD is getting 6.7 percent annual interest instead of 6.5 percent.

You will get interest on investing Rs 5,000 on RD

In an RD of Rs 5,000 every month, you will invest Rs 60,000 in one year and a total of Rs 3,00,000 in five years. You will get Rs 56,830 as interest at the rate of 6.7 percent after 5 years. You will get Rs 3,56,830 on maturity. If you invest Rs 3,000 in RD every month, you will invest Rs 36,000 in a year. Your total investment in 5 years will be Rs 1,80,000. According to the post office RD calculator, according to the new interest rates, you will get Rs 34,097 as interest. You will get a total of Rs 2,14,097 on maturity.

Post office savings scheme changes every three months

TDS is deducted on the interest received on RD. TDS of 10% is applicable on the interest rates received on RD. If the one month interest on RD is more than Rs 10,000 then TDS will be deducted. The Finance Ministry of the Central Government reviews the interest available on small savings schemes every three months.

This time in the festive season quarter of October to December, the government has changed the interest rates only on 5 year recurring deposits. On the remaining schemes, interest rates have been applied at the old rate.

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