Why in news? The Union government raised the interest rates on eight small savings schemes for the January-to-March quarter of 2023, but left the returns on the popular Public Provident Fund (PPF) unchanged at 7.1%.

Highlights:

• The Sukanya Samriddhi Account scheme’s return was also retained at 7.6%, prevailing since April 2020 when small savings scheme rates were cut across the board.
• The returns on Kisan Vikas Patra (KVP) and the National Savings Certificate were raised
• It is the second successive quarter that the Centre has made selective increases in small savings rates.
• Returns on the Senior Citizens’ Savings Scheme and the Monthly Income Account Scheme have been raised

About Sukanya Samriddhi Account

• It is a Government backed saving scheme targeted at the parents of girl children.
• Aim : Encourages parents to build a fund for the future education of their female child.
• Part of the Beti Bachao, Beti Padhao campaign.
• Account can be opened at any India Post office or branch of authorised commercial banks by parent/guardian.

Eligibility

• Age : Anytime between the birth and the time she attains 10 years
• A girl can operate her account after the age of 10

Summary

• Only one account per child.
• Maximum : Two accounts for each of their children (exception allowed for twins and triplets).
• Transfer :Account can be transferred to anywhere in India

Deposit

• Minimum deposit : 50
• Maximum deposit : Rs. 150,000
• After initial deposit any amount in multiples of Rs 100 can be deposited.

Withdrawl

• Higher education purposes : 50% withdrawal at the age of 18
• Account reaches maturity after 21 years from date of opening it

Tax Benefits

• Similar to that of the Public Provident Fund.

About Kisan Vikas Patra

• It is a saving certificate scheme which was first launched in 1988 by India Post.
• Scheme was closed under supervision of Shyamala Gopinath for its recommendation to the Government that KVP could be misused.
• Re-launched it in 2014.

Purchase

• An adult in his own name, or on behalf of a minor
• A Trust
• Two adults jointly

Investment limitations

• Minimum : Rs 1000
• No upper limit on the purchase of KVPs

Tax benefits

• It does not offer any income tax benefits to the investor.

Withdrawal

• Maturity : 2 years 6 months
• Premature encashment is not permissible.
• Only be encashed in event of the death of the holder or forfeiture by a pledge

About National Savings Certificate

• It is a fixed income investment scheme that can open with any post office
• Aim : For individuals to make small or medium savings, and tax benefits are provided for these savings.
• Maturity tenure: 5 years and 10 years(individuals can choose from)
• Loans against NSC: Can be used as a security or collateral

Investors

• Eligible investor :Individuals
• Non-resident Indians and Hindu Undivided Families are not eligible to opt for this scheme.
• Only Indian citizens will be able to invest in the NSC scheme.

Transfer of certificate

• Transfer is possible from one post office to another.
• Transfer of certificate from one individual to another is also possible.

Tax Benefit

• Investments of up to Rs 1.5 lakh can earn the subscriber a tax rebate under Section 80C.