Category Archive : Other Schemes

Small Savings Schemes

Interest Rates on Small Savings Schemes October 2019

Small Savings Schemes Interest Rates Oct-Dec 2019


In this article we will see the updated Interest Rates on Small Savings Schemes – EPF, PPF, SCSS, SSY, NSC, KVP for Q3 FY2019-20 (October-December). All these small savings schemes will continue to fetch same interest rate between October-December quarter of FY 2019-20 as they were earning during the July-September quarter. Ministry of Finance has made an announcement on September 30, 2019.

Financial Planning Knowledge Bank by Invest Yadnya
Financial Planning Knowledge Bank by Invest Yadnya

If you are planning to invest in any of these savings schemes, you should know about their interest rates. For all the small savings schemes interest rates are aligned with Government security rates of similar maturity, with a little spread.

Different Small Savings Schemes

Small Savings Schemes
Small Savings Schemes

Below you can find the interest rates for various small savings schemes:-

Public Provident Fund (PPF)

  • PPF is a long-term investment for a period of 15 years. The government will review the PPF rates quarterly.
  • PPF scheme will continue to offer an interest rate of 7.90% per annum for 3rd quarter of FY2019-20 (October to December) same as last quarter and compounded annually.
Public Provident Fund (PPF) Interest Rates
Public Provident Fund (PPF) Interest Rates

Employee Provident Fund (EPF)

  • Employee Provident Fund is a long term investment tool. Interest rate on EPF contributions is revised every year.
  • The interest rate currently on investments in EPF is 8.65% Per Annum for 3rd quarter of FY2019-20 (October to December).
Employee Provident Fund (EPF) Interest Rates
Employee Provident Fund (EPF) Interest Rates

Senior Citizen Savings Scheme (SCSS)

  • The government will review the SCSS rates quarterly. But, once a subscriber has enrolled, the rates will remain unchanged for the tenure. Deposit has a maturity period of 5 years.
  • This scheme will continue to offer 8.60% interest rate per annum for 3rd quarter of FY2019-20 (October to December) compounded annually.
Senior Citizen Savings Scheme (SCSS) Interest Rates
Senior Citizen Savings Scheme (SCSS) Interest Rates

National Savings Certificate (NSC)

  • From FY2016–17 onwards, the interest rate on the NSC will be revised every quarter as per the prevailing government-bond rates. However, once you have invested in the NSC, the rate applicable that time will remain the same throughout the tenure of the investment. Certificate comes with the maturity period of 5 years.
  • NSC (5 year VIII Issue) is going to offer 7.90% interest rate for 3rd quarter of FY2019-20 (October to December) which is compounded annually but is payable at maturity.
  • The 10 year option of the NSC has been discontinued.
National Saving Certificate (NSC) Interest Rates
National Saving Certificate (NSC) Interest Rates

Kisan Vikas Patra (KVP)

  • The KVP rates will be notified every quarter as per the prevailing government security rates. Scheme aims at doubling the investment in 115 months (9 years 5 months) with the applicable interest rate.
  • However, once you have made an investment, the rate will remain unchanged for you throughout the tenure.
  • KVPs will offer a steady 7.60% as interest rate for 3rd quarter of FY2019-20 (October to December) same as last quarter which is compounded annually.

Sukanya Samriddhi Yojana (SSY)

  • The interest rate for the SSY is to be 75 basis points over the ten year government bond yield. The rates will be revised every quarter and the new rates will be applicable to all the subscribers.
  • Scheme will continue to offer the same interest rate of 8.40% per annum for 3rd quarter of FY2019-20 (October to December) compounded annually which is calculated on a yearly basis.
Sukanya Smridddhi Yojana (SSY) Interest Rates
Sukanya Smridddhi Yojana (SSY) Interest Rates


  • Small savings schemes interest rates have been kept unchanged for the third quarter of the current financial year FY2019-20 despite a general downtrend in interest rates in the economy and belying expectations of a cut.
  • This decision is good news for small depositors and senior citizens as banks have been reducing their fixed deposits (FDs) interest rate since the start of the financial year as the Reserve Bank of India (RBI) has been reducing its key policy rates.
  • Ministry of Finance has made an announcement on September 30, 2019.

7 New Rules For Life Insurance Policies

How the Changes in Life Insurance Policies Impact You?


The Insurance Regulatory and Development Authority of India (IRDAI) has recently announced the new rules for Life Insurance Policies. Lets see how these changes in life insurance policies will affect buyers.

New Rules For Life Insurance Policies

Life insurance products are undergoing major changes which are mostly to the benefit of policyholders. IRDAI has released the new rules for life insurance policies. Lets discuss the updated regulations :

New Rules For Life Insurance Policies Released By IRDAI
New Rules For Life Insurance Policies Released By IRDAI

1.Life Cover in Ulips

  • As far as life cover in the ULIPs front is concerned, the minimum cover offered was 10 times the annual premium earlier. Now, this minimum life cover in ULIPs is going to come down to 7 times from 10 times to those under 45.
  • At present, insurers have to offer a minimum cover of 10 times the annual premium to those under 45 and 7 times to those over 45. For policyholders who are not keen on the protection element, smaller cover will mean lower mortality charges. 
  • A higher proportion of premiums will be directed towards investments. However, one should note the important point that to maximise tax benefits under Section 80C and 10(10D), the life policy has to offer a cover of at least 10 times the annual premium. For policies with 7 times cover multiple, tax breaks under 10(10D) would not be applicable.

2.Maximum Lump sum Withdrawal

  • The maximum withdrawal allowed at maturity under pension plans has been increased from one third to 60%.
  • However, this will not bring insurance pension plans at par with the National Pension System (NPS). In NPS, the 60% withdrawal allowed at maturity is tax free.
  • In pension plans, 60% withdrawal is allowed now but withdrawal of up to one third of the corpus would be tax-free, anything above that is taxable.

3.Minimum term for acquiring surrender value in traditional plans

  • Now, you are not required wait 3 years for your policy to acquire a guaranteed surrender value. Surrender value is the amount you will receive if you decide to exit prematurely.
  • Irrespective of premium paying terms, policies will now acquire the minimum guaranteed surrender value if they have paid at least 2 years’ premiums now, against 3 years earlier for policies with a premium paying term of over 10 years.

4. Freedom to choose annuity provider

  • Annuity is regular, guaranteed pension income payable to the policyholder from the date of vesting till death.
  • In the new rules, Annuity purchase conditions, too, have been liberalised. Currently, a policyholder has no choice but to purchase annuities at maturity from the insurer who has issued deferred pension plan.
  • But now, policyholders can approach insurers offering higher rates for 50% of the corpus. Thus, Open market for the option of purchasing annuity, up to 50% of the investible corpus would be a key change.
  • In earlier condition, a lack of competition used to hurt policyholder interests, as they cannot shop around for higher annuity rates. However, the Relaxation of this restriction will allow policyholders greater flexibility to seek better rates 

5. Flexibility in asset allocation in pension Ulips

  • As of now, insurers have to give a guarantee at the vesting date. Here,guarantee means insurers have to invest largely in debt products and are not able to generate higher returns.
  • But now, this is optional and policyholders can now decide whether they want assured returns or not. Those in the younger age brackets who can stomach risks and afford to stay invested over the long-term can choose to deploy funds in equity. 
  • The change that is likely to make the maximum impact pertains to unitlinked pension segment, which lost steam after insistence on guarantees and purchase of annuities from the insurer who issued the deferred pension plan.

6. Direct premium payment for Ulip riders 

  • Currently, Premiums for riders like accident or disability benefit accounted for by cancelling units.
  • According to the new rules, direct premium paymeny for ULIPs riders is introduced. Direct premium payment means a larger proportion of base Ulip premium is invested.
  • Also, the regulations also provide policyholders the flexibility to reduce their premium after the 5th policy year.
  • Being long-term products, insurance premiums have to be serviced annually and any financial crunch around the premium paying date can result in policy lapsation. Instead, now you can reduce your premiums by 50% and still keep the policy in force. 

7.Extended Revival Period

  • Revival period is the period offered by insurers to revive the policy after you missed paying the premiums after the policy lapses and also during the grace period.
  • The revival period has been increased to 3 years in case of ULIPs and 5 years in case of non-linked products from 2 years.
  • The extension in the revival period will provide you a wider window to revive their policy. Also, with the increase in duration, you will get some flexibility in policy premium payment.
Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS)

Features of Senior Citizen Savings Scheme


Senior Citizen Savings Scheme (SCSS) is a government-backed savings instrument with the highest safety and tax saving benefits offered to Indian residents aged over 60 years. It is the most popular scheme amongst senior citizens of India.

Post retirement, senior citizen look for investment avenues to park their retirement corpus in. They are hesitant to put their hard-earned money in equities, which carry capital loss risk, or products which come with a long lock-in period and don’t offer any income till maturity.  Thus, Retirees look for products that are less risky and can also minimise their tax outgo. This is where SCSS comes in. 

Senior Citizen Savings Scheme (SCSS)

Features of SCSS :

  • SCSS is a low risk, high return investment, especially designed for the senior citizen taxpayers. It also helps to bridge the gap between their pension and last drawn salary.
  • This is an effective and long-term saving option which offers security and added features that are usually associated with any government-sponsored savings or investment scheme.
  • SCSS is available through certified public / private sector banks and post offices across India.
Senior Citizen Savings Scheme (SCSS)
Senior Citizen Savings Scheme (SCSS)

Let us discuss the provisions offered by Senior Citizen Savings Scheme (SCSS) in detail.


  • Investors must be resident individuals aged 60 years and above
  • Retirees who have opted for the Voluntary Retirement Scheme (VRS) or Superannuation in the age bracket 55-60. Here the investment has to be done within a month of receiving the retirement benefits.
  • Retired defense personnel with a minimum aged 50 years
  • Non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not allowed to invest SCSS. 

2.Investment Amount limit

  • Minimum : Rs.1,000
  • Maximum : up to Rs.15 lakh (in multiples of Rs.1,000). The amount invested in the scheme also cannot exceed the money one receives on retirement. Therefore, one can invest either Rs.15 lakh or the amount received as a retirement benefit, whichever is lower. 
  • The SCSS account can be opened by cash for amounts below Rs.1 lakh and by cheque only for amounts of Rs.1 lakh and above.

3.Interest Rate

  • The interest rates offered on Senior Citizen Saving Scheme (SCSS) just like other post office saving schemes are reviewed every quarter by the Ministry of Finance. However, the interest payable on an investment is locked on the date of the investment and does not change even if the rate on the scheme as a whole is revised later. 
  • Only new investments under SCSS are affected by the change in interest rate. However, if an SCSS account is extended post maturity the interest rate that the extended account will earn will be as per the rate prevailing for that scheme on the date of extension. 
  • Senior Citizen Saving Scheme (SCSS) latest interest rate for the quarter July-Sept 2019 is revised to 8.6%, lowered by 0.1% from the earlier interest rate of 8.7%

4.Tenure/ Maturity Period

  • The tenure/ maturity period of the SCSS scheme is 5 years and it can be further extended for 3 more years. 
  • In order to extend the scheme for another 3 years after the completion of the mandated 5-year tenure, the investor is required to submit the duly filled Form B for the extension of the scheme.
  • Only one extension is allowed, and the extension request has to be made within 1 year of maturity of the SCSS account.   

5.Tax benefit & Taxability of Income

  • Tax Benefit : Investment in SCSS is eligible for deduction under section 80C up to Rs.1,50,000. However, this tax benefit is under the overall current ceiling of Rs.1.5 lakh per annum fixed for all investments under Section 80C like PPF, Tax saving fixed deposits, EPF, NPS, NSC etc. There will be no additional benefit under Section 80C for the extension of an existing account after five years.
  • Taxability of Income : The interest received under the scheme is fully taxable in the hands of the depositors. However, senior citizens can claim deduction under section 80TTB for the maximum up to Rs.50,000 in a single financial year. There is a tax deducted at source (TDS) on the interest payment if the amount is more than Rs.10,000 per annum as per current tax laws. 


  • Tenure of SCSS investment is of 5 years and hence, any amount withdrawn after 5 years is exempt from tax.
  • Premature withdrawals are allowed, but only after one year and with premature withdrawal penalty charges.  If one prematurely withdraws after a year, but before two years from the start date, the penalty charges are 1.5% of the deposit, and after 2 years it is 1%. For premature withdrawal, benefit of deduction under section 80C is added back to the income of the depositor.
  • In case of death of the depositor before maturity, SCSS account is closed and the principal along with the interest on SCSS is given to the nominee or legal heir of the account holder. In such cases, the principal amount is not taxable in the hands of the nominee or the legal heir (as the case may be). The interest received after the death of the account holder will be taxable in the hands of the nominee or legal heir (as the case may be). No charges are levied in case of premature closure of account due to the depositor’s death.


  • Since SCSS is an Indian government-sponsored investment scheme, it is considered to be one of the safest and most reliable investment options.
  • At interest rate of 8.6% the return rate is very good as compared to a savings or FD account. SCSS investment is also eligible for tax deduction of up to Rs.1.5 lakh under Section 80C.
  • The tenure of this investment scheme is flexible with an average tenure of 5 years which can be extended up to further 3 years.
  • Nomination facility is available at the time of opening an SCSS account by means of submitting an application as part of Form C.

Pradhan Mantri Jan Dhan Yojna

Scheme Details

Pradhan Mantri Jan Dhan Yojana (PMJDY) is national mission for financial inclusion to ensure access to financial services like savings accounts and deposit accounts, remittance, credit, insurance, pension in an affordable manner.

Account can be opened in any bank branch or business correspondent (Bank Mitr) outlet. Accounts opened under PMJDY are being opened with zero balance. However, if the account-holder wishes to get cheque book, he/she will have to fulfill minimum balance criteria.

The PMJDY scheme was launched in 2014.

Below are scheme investment statistics as on 18 July 2018 (All figures in Rs. crores)

PMJDY Investment Statistics

Purpose of the Scheme

PMJDY was launched with a purpose of having a bank account for each household as a “national priority”.

The scheme has been started with a target to provide universal and clear access to banking facilities starting with Basic Banking Accounts with overdraft facility of Rs. 5,000 after six months and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card.

The objective is to ensure access to various financial services such as access to need based credit, remittances facility, insurance and pension to the excluded sections i.e. weaker sections & low income groups.


Document requirements for opening an account under Pradhan Mantri Jan Dhan Yojana

An account can be opened by presenting an officially valid document.

  • Passport,
  • Driving License,
  • Permanent Account Number (PAN) Card,
  • Voter’s Identity Card issued by Election Commission of India,
  • Job card issued by NREGA duly signed by an officer of the State Government,
  • Aadhaar Card
  • An identity card issued by central/state government departments, statutory/regulatory authorities, public-sector undertakings, scheduled commercial banks and public financial institutions,
  • A letter issued by a gazetted officer with a duly attested photograph can also do.
  • Or any other document as notified by the Central Government in consultation with the regulator.

Given below is the list of banks where an individual can avail the PMJDY scheme.

Banks Offering PMJDY

The Pradhan Mantri Jan Dhan account has many features like a general account such as interest payment on the deposit. Apart from these, there are some other special benefits under the scheme as listed below:-

  • Account holders will be provided bank accounts with no minimum balance requirements.
  • RuPay Debit Cards will be issued.
  • Accidental Insurance cover of Rs. 1 lakh.
  • After six months of opening of the bank account, holders will qualify for Rs. 5,000 overdraft from the bank. (only one account per household, preferably lady of the household)
  • With the introduction of new technology introduced by National Payments Corporation of India (NPCI), a person can transfer funds across India, check balance through a normal phone which was earlier limited only to smart phones.
  • Mobile banking for the poor would be available through National Unified USSD Platform (NUUP) for which all banks and mobile companies have come together.
  • The scheme provides Life Insurance cover of Rs. 30,000 payable on death of the beneficiary, subject to fulfillment of the eligibility condition.
  • Direct Benefit money Transfer to the beneficiaries of government schemes.
  • Access to Pension, insurance products.
  • The Claim under Personal Accidental Insurance under PMJDY shall be payable if the Rupay Card holder have performed minimum one successful financial or non-financial customer induced transaction at any Bank Branch, Bank Mitra, ATM, POS, E-COM etc. Channel both Intra and Inter-bank i.e. on-us (Bank Customer/rupay card holder transacting at same Bank channels) and off-us (Bank Customer/Rupay card holder transacting at other Bank Channels) within 90 days prior to date of accident including accident date will be included as eligible transactions under the Rupay Insurance Program 2016-2017.

As many as 1,767 claims were settled toward accidental insurance to RuPay Card holders under the government’s financial inclusion scheme Pradhan Mantri Jan Dhan Yojana (PMJDY) as said by PM on 15 August 2017.

Eligibility Criteria under Pradhan Mantri Jan Dhan Yojana

To enjoy the benefits of PMJDY, following eligibility conditions should be fulfiled:-

  • The individual should be of Indian nationality.
  • Minors who are 10 years old and whose guardians will manage the accounts. Minors are also eligible to get RuPay Card which they can use 4 times in a month to withdraw cash.
  • A low risk individual is also eligible to open a bank account under PMJDY. By low risk individual, the scheme refers to those individuals who have not have any valid document to support their Indian nationality. Banks can allow them to open bank accounts under PMJDY, once they do a ground research on them and categories them as low risk individuals.
  • A person with an existing savings bank account can transfer his/her account to account to Pradhan Mantri Jan Dhan Yojana account to enjoy the benefits of this scheme.

Given below is an image of the form to be filed to open an account under the scheme

PMJDY Account Opening Form

Age limitations under Pradhan Mantri Jan Dhan Yojana

The minimum age limit for a minor is 10 years. Else, any Indian resident over the age of 18 years is eligible to open this account. Income is not a bar to open a PMJDY account, although it is primarily meant for the poor section.

Exit Rule of PMJDY

An account holder under PMJDY scheme will have to exit the scheme when she/he reaches the age of 60 years.

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