The special feature of KVP and other savings schemes is that they come with sovereign guarantee. Among the savings schemes supported by the Government of India, the three savings schemes with the highest interest rate are the SCSS PPF and SSY scheme.
New Delhi: At a time when the stock market is volatile, small savings schemes offer much better options for safe investment. One very popular small saving scheme is the Kisan Vikas Patra (KVP). This scheme offers attractive interest rates. It is one of the highest interest rate yielding savings schemes. The scheme is currently offering 6.9 per cent compound annual interest rate. The amount invested in this scheme doubles in 124 months (10 years 4 months).
SEBI Registered Investment Advisor Jitendra Solanki told that minimum 1000 rupees can be invested in Kisan Vikas Patra. Also, there is no limit on the maximum amount. Amount can be deposited in multiples of 100 in the scheme. The scheme includes opening of single adult, joint account (up to 3 adults), a guardian on behalf of a minor and a guardian account on behalf of a mentally challenged person. Any number of accounts can be opened in this scheme.
The investment of this scheme matures in the maturity period as stated by the Finance Ministry from time to time. According to Solanki, the special feature of Kisan Vikas Patra and other savings schemes is that they come with sovereign guarantee. Three of the highest interest rate savings schemes supported by the Government of India are the Senior Citizen Savings Scheme, Public Provident Fund and Sukanya Samriddhi Yojana. Let us know about these also.
Senior Citizen Saving Scheme (SCSS)
The scheme provides guaranteed retirement income. To invest in this scheme you have to be an Indian citizen with age of 60 years. For those who have retired under the voluntary or special voluntary scheme, the age requirement is 55 years. At the same time, for those who have retired from the defense services (other than civilian security staff), the age for investment has been kept at 50 years with certain conditions. Minimum investment of Rs 1000 and maximum investment of Rs 15 lakh can be made in this scheme. The duration of this scheme is 5 years. This can be extended for 3 years. In this scheme, the account can be opened singly or jointly (with spouse). Currently, the interest rate in this scheme is 7.4 percent per annum.
Sukanya Samriddhi Yojana (SSY)
This scheme is for daughters. Under this scheme, parents can open an account in the name of their daughter, younger than 10 years. This account can be opened by going to the post office or any bank. This account can be opened for a maximum of two daughters of a family. According to the website of India Post, this account can be opened with a minimum amount of Rs 250. A minimum of Rs 250 and a maximum of Rs 1.50 lakh can be invested in a financial year. According to Tax and Investment Expert Balwant Jain, the interest rate in this scheme is fixed by the government for every quarter. The amount in this account can be deposited in lump sum or in installments. Funds can be deposited in the account till the completion of maximum 15 years of account opening. The scheme is currently offering a compound annual interest rate of 7.6 per cent. Interest will be deposited in the account at the end of every financial year. Interest received in this scheme is tax free.
According to the website of India Post, an account can be opened in Public Provident Fund with a minimum of Rs 500. At the same time, a maximum of 1.5 lakh rupees can be invested in the account annually. According to SEBI Registered Investment Advisor Jitendra Solanki, PPF comes with a maturity period of 15 years. This can be extended further for 5 years. The interest rate on PPF is fixed by the government every three months. The PPF is currently offering a compound annual interest rate of 7.10 per cent. Under this scheme, interest is paid on 31 March every year. An investor can also take a loan on the amount of PPF. The special thing is that investors also get tax benefits in this.