Interest rate of PPF, NSC, KVP, SCSS and Sukanya Samriddhi Scheme for 2015-16

Today (31st March 2015) Finance Ministry announced the interest rates for Post Office Schemes like Public Provident Fund (PPF), National Savings Certificate (NSC),Ā Kisan Vikas Patra (KVP), Senior Citizen Savings Scheme (SCSS), and for Sukanya Samriddhi scheme. These interest rates apply from 1st April 2015 to 31st March 2016.

Below table shows the interest rate applicable for Post Office Schemes, PPF and Sukanya Samriddhi Scheme for FY 2015-16.

C-Interest rate of PPF, NSC, KVP and Sukanya Samriddhi Scheme for 2015-16-

I highlighted the changed interest rates with blue color. You notice that the Government changed interest rates only for Senior Citizen Savings Scheme (SCSS) and its dream scheme Sukanya Samriddhi Scheme. For a rest of schemes it unchanged.

To me, it looks like the Government is pushing it’s launched the scheme Sukanya Samriddhi Scheme more aggressively with increasing the interest rate. It currently looks attractive. But will the same or the next Government offers the same interest rate? I fully doubt these political moves. So one must be cautious while investing in Sukanya Samriddhi Scheme. What if in the future this Government or next Government started offering you a lesser interest rate? Because this scheme to me looks more of a political gimmick than actually scheme meant forĀ the girl child. Ā 

You may read my reviews about these schemes by clicking on below links.

Hope this above information will help you a lot.

117 Comments

  1. Hi Basavaraj,

    I wish to invest 100,000.For 10 years which one will be beneficial ? Kishan Bikash Patra or NSC

    Reply
    • JD-In my view BOTH I consider them as debt products. Hence, you must have around 40% into such products. Rest 60% in equity mutual funds.

      Reply
  2. Dear Basavaraj,

    Is a KVP better option than a FD. I would like to invest 1L for 10years in KVP (heard the amount doubles in 110months)

    Are the taxes higher in FD or KVP ?

    Reply
  3. Hi Basavaraj,

    How do I apply for Govt Bonds: Infrastructure Bonds, Bonds Market, Capital Gains Bonds …which are NON-taxable.

    Regards

    Reply
    • Irshad-There are brokers. You can invest them while they are in offer. Otherwise, you can buy the old offers in secondary market too.

      Reply
  4. Dear Basavaraj,

    I am interested in taking NSC(5years) + Kisan Vikas Patra (10years) from Post office. Could you inform me whether the interest amount accrued after the term would be taxed ? Are these tax free instruments ?

    Thanks

    Reply
      • Thanks a lot for the quick feedback. I just checked with the Post Master – Head at 2 or 3 branches (+I checked on internet). Interest from NSC is non-taxable.

        Reply
        • Irshad-Only GOD can protect them who take advice from such Post Masters. Refer this link of Post Office. They mentioned that there will not be any TDS. But they not mentioned it is tax-free.

          Reply
          • We should take GOD that there are good Samaritans like you !!!

            Reply
  5. Hello Sir,
    I have read your post and it is very helpful in my financial planning.I have a question .thanks in advance ::
    I am a merried soft engg and have currently 7,20k package.I have already deposit 50k in my PPF .I can show these 50k in 80c.I have 1lac more to invest.and my short term goal is getting atleast 1.5 lac after 4 years.also i am planning to buy a flat whose emi will cost me around 15 to 20k.so i think that cover my tax redemption.now i am confused for investing these 1lacs.should i go for some gold scheme,or some SIP plan or something else?also i am thinking of investing some small amount in nps but not sure much about that.

    Reply
    • Tushar-First understand your goal. Then based on that chose a product.

      Reply
  6. Hi Basu,

    I have a doubt about the Sukanya scheme. Is it 21 years from the date of opening or 21 years/the girl’s marriage date whichever is earlier? So, if an account is opened at the 10th year of the girl, she can’t with draw it until 21 years, so she will 31 years old and what is the use, I wonder. Please clarify. Thanks.

    Reply
    • Teja-Term is 21 years. However, once the girl’s marriage account ceases itself. If she not marry during this 21 years, then the account ceases at 21 years itself. In your example, she can withdraw at any point of time during her marriage. Otherwise, she can continue the account up to her 31 years of age.

      Reply
      • Many many thanks Basu. I’m clear now.

        Reply
  7. Dear Basavraj sir I am 32 year old. I want to to know what should be my retirement corpus after 30 years. I have read your blog and came to know that I have to invest in mutual fund, PPF / NPS,. Now my annual income is 1000000. So how much I should invest in mutual funds and how much in PPF/NPS to enjoy good returns after age of 60. I have term plan, health ,accidental insurrance, professional indemnity insurrance.

    Reply
    • Ravi-your retirement corpus depends on your spending habits but not how much you are earning NOW.

      Reply
      • Sir I spend approximately 30000 per month now

        Reply
  8. Hi,

    I already have a term plan for myself and an LIC policy for my wife.
    I am already investing in an SIP (Axis LTE) as INR 3000 pm.

    Can you let me know some more investment avenues where I can park INR 8000 pm?
    This investment should help me in saving tax also.

    Reply
    • Prakash-First identify your goals, then an asset class. Finally look for a tax efficient product among them. Without knowing much about all these, how can I guide you?

      Reply
      • Goals – to buy a house and for kids and my retirement.

        Reply
        • Prakash-Now you mentioned goals, what about timeframe? Whether basic things like life, health and accidental insurance and emergency funds are properly maintained? If not, then first priority should be towards them.

          Reply
          • I am 29 years old.

            Time frame would be 7 years for buying a house and kids in another 2 years time.
            Already have a policies in places for life, health and accidental for my wife and myself.
            Best of my knowledge I have also maintained Emergency funds.
            However, can u tell me how much should be set aside for emergency fund?

            Reply
            • Prakash-Your emergency fund must be at least 6-12 months of your household expenses.

              Reply
  9. Hi, I have a girl child 1.5 years. I Want to start investing monthly for her education. My goal is to get 300000 in 15 years. Please suggest me good investment scheme, amount to deposit each month. Also i’m investing monthly 2000 in Axis LT Equity fund, it is not performing well recently, is it good to proceed? Please suggest your opinion and help me in this regard.

    Reply
    • Viban-Continue Axis Fund. Along with that start investing in PPF. Invest equity:debt in ratio of 70:30. For equity use Axis (existing fund), one large cap fund like Franklin India Bluechip Fund and one small adn mid cap fund like HDFC Midcap Opp Fund. For debt 30%, use PPF.

      Reply
  10. Isn’t NSC 10 year discontinued?

    Reply
  11. Hi Basavraj,

    I had invested in NSC two years ago.
    I want to show the accrued interest as re-investment under 80D.
    1. Is this correct ?
    2. If yes should I ask the Post Office about the Interest accumulated till now ? or get an interest certificate for tax proofs ?

    Thanks,

    Reply
  12. sir
    I want to invest Rs.150000 for tax benefit. My age is 49 years. can you suggest for better investment in NSC/PPF? wait for your reply

    Reply
    • Nitaichand-It depends on your financial goal. Hence, hard to advice you.

      Reply
  13. Hi Bsavaraj, I read your previous posts and must say you have been extremely helpful to people. Appreciate your help.

    I had a question, I want to invest 10 k per month into SIP’s. Should i invest into Equity SIP’s or Mutual Fund SIP’s.
    I can take moderate to high risk with this 10 k.

    Please suggest.

    Warm Regards,
    Sachin

    Reply
    • Sachin-Avoid direct equity and start investing in Mutual Funds. Use one large cap fund and a equity oriented balanced fund to start. Ideally, this investment must be for more than 5+ years.

      Reply
      • Hi basavaraj I am planning to open an ppf account ,for investment.
        Is any other investment plan which are safer

        Reply
        • Amar-Do you feel PPF is safe? There is an interest risk attached to it. Safest way of keeping your money is nowhere in the world. To certain extent keeping money in your savings account is safe. But not fully.

          Reply
  14. Well Mr. Basavaraj Tonagatti, I read all the Questions and Answers carefully provide on this page. Most of them sorted out my queries. I need to ask you one thing. If I invest 1,oo,ooo INR per year, no matter for how much years. My concern is, Will it be tax free or not when I get the maturity amount on these NSC, as well as in PPF account?

    Reply
    • Praveen-Interest earned from NSC is taxable and PPF is tax free at maturity also.

      Reply
  15. Hi,

    I am IT employee.My CTC is 2.9 LPA. Iā€™m a beginner in this investment field. plz guide me about best investment plan.

    Reply
    • Shruti-Without knowing much about your goals and financial life, it is hard for me to guide.

      Reply
  16. Hi,
    I want to invest on NSC, i.e 20k for this year. So, i can show this into Tax purpose for this year.
    Can I show these investments for next year also ? or I need to create one more NSC in next year?

    Reply
    • Adiga-Your investment of Rs.20,000 can be showed to this FY only. You can’t show the same for next year as you have not done any fresh investment.

      Reply
  17. I’m a beginner in this investment field. Read few of ur suggestions n advices which I felt very useful for the mango man . Keep up the good work in best of its spirit.
    Regards.

    Reply
  18. Sir plz guide me about best investment plan. As i am software Engg. and i am planning to invest Rs 1,50,000 per year.

    Reply
    • Shashi-Without knowing your current financial life and goals, it is hard to guide you.

      Reply
      • Sir, My CTC is Rs 6,25,000 and want 2 BHK flat in pune and more saving by investing my amount to get income tax Benefit.

        Reply
  19. Hi Sir,

    Currently I am investing in the following Mutual fund SIP’s:

    1. HDFC TOP 200 (Growth) – Rs. 2000/- (As the fund is not performing well, should I switch over to other fund? if yes, which one)
    2. HDFC Prudence Fund (Dividend- Reinvested) – Rs. 1500/-
    3 Birla Sun Life 95 Fund (Growth) – Rs. 1500/-
    4. DSP Black Rock Equity Fund (Growth) – Rs. 1500/-
    5. Kotak Focus Select Fund – Rs. 2000/-

    Please guide me about continuing with the above SIP or switching over? I am investing it for a long term (8-10 yrs)

    Reply
    • Priya-1) Continue the fund. 2) If possible switch to HDFC Balanced Fund or Tata Balanced Fund. I don’t know why you selected dividend reinvestment option. 3)This is again a balanced fund. Follow the instruction No.2. 4) Switch to Franklin India Prima Plus or merge with Kotak Focus Select Fund.

      Reply
  20. Respected sir,
    I want to invest 50000 INR of my father as Senior Citizen in Post office.
    Please guide me which option is best or should I invest some where else?

    Awaiting for your reply

    Reply
    • Chandresh-It is hard for me to guide without knowing your actual requirement.

      Reply
      • As I want to invest that 50000 INR in such way that whenever I require money in future so very easily I an withdraw.

        Reply
  21. I want to buy Natinal Savings Certificate of Rs. 50000/- for 10 years (IX-Issue).
    Could you please tell me after purchase whether I have to submit 15G form for upt0 10 years for tax benefit ?
    Please let me know.
    Thank you,
    Warm regards,
    Rahul

    Reply
  22. Int rate on scss will remain same for all 5 yr in I invest 2day.
    @ 9.30 for all 5 yr or it will be declared every f.y. By govt of india

    Reply
  23. Sir, I want to invest approx 1 lac annually for my 1 year old child, please suggest where shall I invest.
    I want to use that funds for his future studies and his marriage.

    Reply
    • Amit-Stay away from any debt instruments. Buy term insurance to cover your life risk. Start investing into 30:70 debt:equity mutual funds.

      Reply
  24. hi,

    I want know about my investment plan actually
    i need to invest 10000 rupees per month, so please suggest me what is the good way to invest the money for best growth.please suggest me any SIP or others.

    thanks.

    Reply
  25. Hello Basavaraj,

    I am ready to take risk, and i am interested in investing 1 lac in mutual funds.
    I am looking for only 5 yrs investment only.
    I wanna do a lumpsum investment and i have chosen 2 funds.
    1) ICICI pru tax
    2) SBI blue chip

    Please can you suggest or guide me about more in mutual funds and help me in identifying which are the good funds to select.
    OR
    Can you advise me on any financial plans which are good only for 5 yrs. i need money back for paying downpayment to buy home.

    Thanking You.

    Reply
    • Harish-Stay away from equity mutual funds if your time horizon is 5 years only. Instead park 50% in Bank FD and another 50% in Short Term Debt Funds.

      Reply
      • Would ElSS be a be better option?

        Reply
        • Harish-Each product have it’s own positives and negatives. So it depends on you as an individual to look it’s suitability.

          Reply
  26. sir

    i want to invest 5000 mntly in sip long term for future savings and safety.

    pls suggest me 3 funds

    1 large cap

    1 small cap

    1 mid cap fund so that the risk diversify

    or wat u feel only 2 funds or etc pls suggest the names

    Reply
    • Meena-Two funds are enough like a large cap and small/midcap. But strictly for long term investment.

      Reply
      • I don’t understand why don’t we invest in more good funds.

        e.g. Let us say my monthly SIP investment = Rs. 10,000 so I can split into small amount of Rs.1,000 and invest in following category by DIRECT PLAN. is this good option or not (why?)

        Large – Rs. 1,000
        Large – Rs. 1,000
        Large – Rs. 1,000
        Mid/Small – Rs. 1,000
        Mid/Small – Rs. 1,000
        Mid/Small – Rs. 1,000
        Diversified – Rs. 1,000
        Diversified – Rs. 1,000
        Hybrid/Balanced – Rs. 1,000
        Hybrid/Balanced- Rs. 1,000

        Reply
        • Arul-What purpose it serves by choosing 3 funds within a same category??

          Reply
          • As I think, It decreases the risk. I too want to invest 5000 in SIP for long term. I have also same confusion. Please suggest the correct way.

            Reply
  27. Although Govt has launched Sukanya Scheme for the benefit of girl child, I think most people are taking it as a income tax instrument only. Govt could make some contribution for the lower class people as they may find it difficult to contribute regularly and make a corpus for girl child education.

    Reply
    • Manidipa-Drama just started about Sukanya Samriddhi, wait and watch for few more years or when Government change. It is just a political gimmick which forcing the current Government to set 9.2% interest rate but not raised the interest rate for rest of products. It is terrible for investors once the Government changes. Because all such schemes meant for political gain rather than actual concern for a girl child.
      Government not concerned about what lower class people suffer, but to take mileage in their political game.

      Reply
  28. Hi Basavaraj,

    I’m a small scale investor. I buy equity when I have surplus of money after doing tax saving (for 1.5L tax saving, i add around 50K in PPF, 40K in life insurance and rest will go from my home loan principle).
    I need your help in understanding Mutual funds, Gold ETF and Gold funds. This year I want to get into investing paper gold and mutual funds for high returns. Please suggest which ones I need to buy and how can I decide which are good/not. I can make investment around 20K/month. Please help me…. I do not know anything about mutual funds….

    Reply
    • Anna-For your information, gold is more volatile than equity investment with return of less than Bank FDs. Now decide yourself whether you need to take risk for earning such less return?

      Reply
      • Actual reason, y i want to invest in paper gold is, I dont want to hurdles with buying physical gold now/pay making, wastage charges for ornaments so that Whenever i want physical gold, i would like to sell paper gold.
        Seeing thing, let me know whether Gold ETF, Gold fund are good or shall i drop the plan.
        Coming to Mutual funds, which one will be better.

        Reply
        • Anna-First let me know whether you want Gold products purchase for current usage or for future usage. If for future usage then after how many years?

          Reply
          • Gold purchase would be approximately after 5-10 years.

            Reply
            • Anna-In that case, why can opt for a simple Balanced fund. This gives more return than the Gold you trying to accumulate. At the end of 10th year, you can withdraw from fund and buy a physical gold for usage.

              Reply
              • Could you please let me know what do you mean by Simple balance fund.
                Apart from that, i’m also looking for high return mutual funds. would like to start mutual funds from this year. I would like to retire in next 10 years. I want to have money accumulated, so that i can use after my retirement.

                Reply
                • Anna-A funds like HDFC Balanced Funds. High return will come with high risk. Are you ready for that?

                  Reply
                  • Yes, i’m ready to take risk. But do suggest me in which one i need to invest and how much.

                    Reply
                    • Anna-Use the same Balanced fund which I suggested above. How much depends on your capacity. I can’t say on this.

                    • Hi Basavaraj,

                      I’ve found 4 different Balanced funds from HDFC. Could you please suggest which one i need to buy.
                      Balanced fund(D)
                      Balanced fund(G)
                      Balanced fund – Direct(D)
                      Balanced fund – Direct(G)

                    • Anna-Let us say, you invested Rs.100 and it grown to Rs.102. Then in dividend option they pay you Rs.2 and in growth they re-invest that Rs.2 for further growth. Direct means, a fund where no middlemen involved. You directly invest with mutual fund (manage the fund on your own). Hope you got clarity.

                    • Hi Basavaraj,

                      Apologies for being so dumb. I could learn a bit by reading your blogs and responses. Please help me how to do buy on my own. I dont want any middlemen as you are there to advice me. Actually thats how we individuals learn right…(that how i learned about equity ;)) Do i need to bu from my demat account/do i need to open HDFC account? I can invest 20K/month. Do you want me to invest in 5K each in Elss, lage cap, medium cap and balanced? Or shall i invest whole 20K in balanced Growth direct?

                    • Anna-Demat account not required to buy direct. You can visit personally (at beginning for processing of KYC) to mutual fund company and start investing. But, do remember that buying alone will not finish your task of investing. You must monitor it and balance it whenever you require. Hence, if you are capable to doing all on your own then go for DIRECT, otherwise a regular mode. Many investors start to do direct with enthusiasm that they saved few bucks. But investment is not only saving expenses but monitoring and managing it. Think and decide.

                    • Also, let me know for how long i need to buy these? is it yearly/5/10/15/ 20 years?

                      Please help me buying MF for my retirement and children education planning.

                    • Hi Basavaraj,

                      I was just going through all the details. Found that HDFC Balanced fund(G) is ranked 1 in Crisil and HDFC Balanced fund ā€“ Direct(G) doesnt meet Crisil’s eligibility criteria. Please suggest me which one i need to buy Plzzzz…..

                    • Anna-First thing, never run behind star ratings. Second thing, underlying investment and philosophy for both regular and direct are same. Hence, don’t worry and go ahead.

                    • Thanks Basavaraj. Would you want me to invest monthly 10K for Balanced Growth, 10K for ELSS? or 20K for Balanced?

                      How much should be the tenure? 10/15years?

                    • Anna-You can select ELSS if you really required tax saving. Otherwise Balanced fund is enough.

  29. I am a farmer and my income is agricultural income and weather I have to pay any taxes in scss

    Reply
    • Nitesh-SCSS interest return is taxable. But do remember that it depends on at what slab of Income Tax you be.

      Reply
  30. can I invest 15 lac in my post office senior saving scheme & another 15 lacs in my wife’s name

    Reply
    • Nitesh-You can do so. But do remember that interest earned is taxable.

      Reply
  31. Hi sir,

    I wanna start to invest in mutual funds, I don’t have brief knowledge, I already have some lic policy for insurance purpose, and I am doing some small investment in ppf, I want to invest in mutual fund like sip in 5000 per month please advise me in which I can invest shall I invest in reliance small cap and late cap for long term investment??

    Reply
    • Saravana-Have you first understood what do you mean by these small cap or large cap funds?

      Reply
  32. Hi Basunivesh,

    I am phani from hyderabad. I have opened PPF account in ICICI bank in the month of 16th May 2014. From May to March I have invested total amount of Rs28500. Since the PPF interest rate is 8.7% the interest rate i am expecting is
    Interest = (28500*8.7)/100=Rs 2479.5

    But I have received interest as Rs 1504 only in the march End. Could you help me in why I have received low interest. My transaction details are below:
    Transaction Date Amount
    07/04/2015 1,000.00
    31/03/2015 1,504.00
    09/03/2015 1,000.00
    02/02/2015 1,000.00
    05/01/2015 500
    08/12/2014 500
    05/11/2014 500
    06/10/2014 5,000.00
    03/09/2014 5,000.00
    05/08/2014 5,000.00
    02/07/2014 5,000.00
    03/06/2014 4,000.00
    20/05/2014 500
    16/05/2014 500

    Thanks,
    Phani

    Reply
  33. Hello Basu,

    Can you please help with my query on SCSS: As I understand, I can invest upto Rs. 15 Lakh per year. So if I want to use SCSS for claiming tax benefits (via 80C), can I invest Rs. 1.5 Lakh per year (in successive years)?
    Please explain in case my understanding is incorrect.

    Regards,
    Arun

    Reply
    • Arun-SCSS limit of Rs.15 lakh is not per year but to an individual. Suppose you invest Rs.5 lakh this year then the limit available for next year is only Rs.10 lakh.

      Reply
  34. Hi Basavaraj,

    I wish to start investing in mutual funds (SIPS). How do I approach ? Can it be online? I am 32 and risk taker and wish to invest in Equity Fund (60-70%) and balance in Growth Fund. Appreciate your advise before proceeding further. (sectors I may prefer Pharma, Infra, Oil and Gas, E-com). You can suggest better once.

    Reply
    • Rahul-First understand why you want to invest? Forget about online and offline process. What do you mean by RISK TAKER? Undersatnd the meaning of equity and growth fund first. Growth fund is an option within mutual fund. You need to learn a lot to start. Don’t jump into it without knowing.

      Reply
  35. Sir,
    I am doing SIP as follows for long term(15 year) since last yer

    1- ICICI Prudential focusd Blue Chip -2000/-
    2-Quantum Longe Term Equity – 1000/-
    3-IDFC Premier Equity – 2000/-
    4-HDFC Top 200 – 1500/-
    5- Tata Balanced Fund – 2000/-

    Now I want to add either
    DSP Blackrock Micro Cap – 2000/-
    Canara Robico Emerging EquityGroth -2000/-

    Please suggest, I am moving in right direction or if any correction required

    Reply
    • Manas-First of all why so many funds? Retain one large cap and one small and midcap fund. Same to fresh investments also.

      Reply
  36. Hi Sir,

    I am new to Mutual fund, i am planning to invest Rs.1500 monthly on each of the below funds for 15+ years.

    * ICICI Pru Focused Bluechip Fund
    * HDFC Midcap Opp Fund
    * Reliance Equity Opp Fund (G)
    * HDFC Balanced Fund (G) :-
    * Reliance Tax Saver

    Also, Please suggest to have investment at begining ( 5th , 10th) or at the end ( 20th , 25th) of the month. People say that investing at the end of month is benificial , whats your thought on this ?

    Waiting for your reply Please suggest.

    Regards,

    Dinesh

    Reply
    • Dinesh-How you arrived at these funds? To be ICICI, HDFC both funds are sufficient. I mean total 3 funds. There is no historical proof that a particular SIP date works wonder for you. So don’t listen to rumours. Select a date of your comfort. Staying long term is success mantra than the date of SIP.

      Reply
  37. Dear Sir,

    I want to invest 6000 Rs/month in mutual fund through SIP. I have no any mutual fund right now. I think I have to invest in one large cap, one samll/mid cap and one diversified SIP. I want to invest for 15-20 years period.
    Please suggest me which fund should I select ?

    Reply
    • Bharat-When you selected one large cap and another small/mid cap fund then what do you mean by diversified SIP?? How you planned for the emergencies like Life Insurance, Health Insurance, Accidental Insurance or emergency fund? Do those things at first then go ahead for investment.

      Reply
  38. Hi Basavaraj,

    Thanks for the information.

    What is the interest rate for post MIS scheme? Also, with the new 2015 budget amendments, does MIS also fall in ambit of TDS deduction above 10,000Rs?

    Thanks.

    Reply
    • Abhijit-There is no change in MIS interest rate. I updated the same in an above image. There are no changes in taxation part from new budget 2015. Also please keep in mind that no TDS means no TAX. So whether TDS is there or not, the interest earned is taxable.

      Reply
      • @Basu:
        > > Also please keep in mind that no TDS means no TAX.
        This stmt requires correction! “no TDS doesn’t mean no tax”.

        Reply

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