FD Interest Rate: A TD small savings scheme now fetches interest at the rates of 5.5-6.7%Small Savings Scheme FD Rate: From April 1, investment in the Time Deposit (TD) small savings scheme fetches returns to the tune of 5.5-6.7 per cent, compared to 6.9-7.7 per cent in the quarter ended March 31.
The Time Deposit scheme is a term or fixed deposit scheme in which the investment is locked in for a fixed period of time and the interest is paid on the investment at regular intervals.
The Time Deposit small savings scheme is currently offered in four maturity options, ranging from one year to five years.
A TD investment in one- to three-year options fetches a return of 5.5 per cent each, compoundedquarterly, while a five-year lock-in gives a higher return of 6.7 per cent.Time Deposit (Fixed Deposit) Maturity PeriodInterest Rate In January-MarchInterest Rate In April-JuneCompounding FrequencyOne year6.9%5.5%QuarterlyTwo years6.9%5.5%Three years6.9%5.5%Five years7.7%6.7%(Source: dea.gov.in)The government has lowered interest rates on most small savings schemes by 80-140 basis points (0.8-1.4 percentage point) for the first quarter of financial year 2020-21, according to an official statement.Here are the interest rates applicable to other small savings schemes:InstrumentInterest Rate In January-MarchInterest Rate In April-JuneCompounding FrequencySavings Deposit4%4%AnnuallyFive-Year Recurring Deposit7.2%5.8%QuarterlySenior Citizen Savings Scheme (SCSS)8.6%7.4%Quarterly and paidMonthly Income Account7.6%6.6%Monthly and paidNational Savings Certificate7.9%6.8%AnnuallyPublic Provident Fund7.9%7.1%AnnuallyKisan Vikas Patra7.9% (matures in 113 months)6.9% (matures in 124 months)AnnuallySukanya Samriddhi Account8.4%7.6%Annually(Source: dea.gov.in)Currently, the Ministry of Finance offers nine types ofsmall saving schemes, including the 15-Year Public Provident Fund (PPF), the Senior Citizen Savings Scheme (SCSS) and the Sukanya Samriddhi scheme, and revises the interest rates applicable to them on a quarterly basis.