From July 1, these 3 small savings schemes will earn you more money

Boost your savings with increased interest rates on small savings schemes. The government has hiked the interest rate on several schemes for the July-September 2023 quarter.

This is the fourth time in the past year that the interest rates on these schemes have been raised.

Starting from July 1, the government has increased the interest rates on small savings schemes, offering you an opportunity to earn more money. This is the fourth time in the past year that the interest rates on these schemes have been raised. Let’s see how you can benefit from these increased rates and maximise your earnings. The Post Office Time Deposit Scheme (one and two-year tenure) and the Post Office Recurring Deposit Scheme are the small savings plans that will allow you to make the most of the revised rates.

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1) Post Office Time Deposit (1 Year): The interest rate for a one-year tenure has been raised from 6.8 per cent to 6.9 per cent for July-September. Suppose you invest Rs 10,000 in this scheme for one year. With the new interest rate of 6.9 per cent, for every Rs 100 you invest, you will earn Rs 6.9 as interest over the duration of the scheme. The interest is calculated quarterly and added to your account every three months. You can open an account with a minimum of Rs 1,000 and in multiples of Rs 100. There is no maximum limit for investment, and the annual interest can be credited to your savings account by submitting an application. No withdrawal is allowed within six months from the date of deposit.

2) Post Office Time Deposit (2 Years): The interest rate for a two-year tenure has been increased from 6.9 per cent to 7 per cent for July-September. The new interest rate means that for every Rs 100 you invest, you will now earn Rs 7 as interest. The interest calculations are done quarterly, and at the end of each year, the interest earned will be added to your account. You can open an account with a minimum of Rs 1,000 and in multiples of Rs 100. It's worth noting that the investment in the five-year time deposit scheme qualifies for the benefit of section 80C of the Income Tax Act, 1961. This means you can claim deductions on eligible investments and expenses up to Rs 1.5 lakh from your taxable income, reducing your overall tax liability.

3) Post Office Recurring Deposit (RD) Scheme: The interest rate for this scheme has been raised from 6.2 per cent to 6.5 per cent for July-September. Suppose you invest Rs 10,000 annually in the RD scheme. At the end of the year, you would earn Rs 650 as interest. The tenure of the Post Office RD scheme is five years, and you can make regular monthly deposits of a fixed amount. The minimum deposit amount is Rs 100, and any additional deposits must be made in multiples of Rs 10.

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Personal Finance small savings schemes