Savings Schemes with Highest Returns: PPF, SCSS, and SSY

PPF, SCSS, SSY: 3 Savings Schemes Offering The Highest Returns

3 Min Read |  April 20, 2021


After suffering a stern resentment on social media on March 31, over the interest rate cuts in small savings schemes such as the PPF (Public Provident Fund), SCSS (Senior Citizen Savings Scheme), SSY (Sukanya Samriddhi Yojana), current deposit, and a host of other such schemes, on April 1, the finance ministry decided to withdraw the order. 

Finance Minister, Nirmala Sitharaman confirmed through the tweet that interest rates of small savings schemes of the government of India shall continue to remain at the rates which endured in the last quarter of 2020-2021. 

The small savings schemes basket consists of 12 instruments, including Kisan Vikas Patra (KVP), the National Saving Certificate (NSC), Public Provident Fund, and Sukanya Samriddhi Scheme. Some of these schemes are known to provide the highest returns to their investors and that’s what we are going to discuss in this blog. So, let’s get started.

3 Savings Schemes Offering the Highest Returns

Public Provident Fund, Sukanya Samriddhi, and Senior Citizens Savings Scheme are three schemes that offer the highest returns. 

1. Public Provident Fund (PPF)

It’s one of the most popular schemes suitable for long-term investments. It aids people in saving fund for their retirement. Furthermore, it offers high interest rates and comes with amazing tax benefits, security to capital, and tax exemption. 

The returns as well as the interest earned aren’t taxable under the Income Tax. Hence, it’s known to be one of the best tax-saving instruments today.

If you compare the interest rates, the Public Provident Fund offers higher rates than other fixed investment products of similar tenure. You can make investments in PPF in a maximum of 12 instalments. 

The maximum investment allowed is Rs 1.5 lakh while the minimum is Rs. 500 for each financial year. The tenure of the PPF account is 15 years and the current interest rate is 7.1\%. 

Want to know how to check PF balance? Well, we have a blog on the same, click here to read

PPF lets you earn tax-free interest without any restriction in terms of investment. Moreover, it has a shorter lock-in period and yields a longer investment horizon. 

Learn how to withdraw the PF amount from your EPF account

2. Senior Citizens Savings Scheme (SCSS)

The government of India launched this scheme in 2004. The scheme offers guaranteed retirement income. To invest in this scheme, you must be an Indian citizen of 60 years of age. 

However, if you are someone who has retired on superannuation or under the special voluntary scheme or under a voluntary scheme, you need to be of 55 years of age. 

The interest rate on SCSS currently, (April to June 2021) is 7.4 per cent per annum, payable quarterly. The retired personnel of Defence Services other than Civilian Defence Employees may invest in this scheme on attaining the age of 50 years which is subject to the meeting of certain criteria. 

The maximum investment allowed is Rs 15 lakh while the minimum amount must be Rs 1000. The tenure is 5 years, however, it can be extended to 3 more years. One can open an account individually or jointly with his/her spouse. 

3. Sukanya Samriddhi Yojana (SSY)

It’s a government-backed small savings scheme. One can open an account with Sukanya Samriddhi Yojana in the private sector or designated public sector banks like HDFC, SBI, etc or in post offices. 

SSY is among the most rewarding investment options in the fixed income category. You can invest in this scheme for up to two girl child or three in case they are twin as second birth or the first birth itself results in three girl children. 

If you have a girl child under the age of 10, you can open an SSY account in her name. On completion of 21 years from the date of opening or on the marriage of your daughter after she turns 18, your account will mature. 

The maximum lock-in period of the scheme is 21 years from the date of account opening. For example, if you start investing when your kid is 9 years old, the SSY account will mature when she attains the age of 30. 

Currently, you invest in multiples of Rs 100 subject to a minimum of Rs 250 and a maximum of Rs 1.5 lakh every year. For the first 15 years, you are required to invest in the scheme after which it ears interest for a maximum of six more years. 

The rate of return for this scheme is 7.6\%. 

So, these were some amazing government schemes that people can opt for to get the highest returns. 

I hope you enjoyed reading this piece of content. If so, then do share it with your friends!

Till then, happy learning and happy investing!

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