Public Provident Fund (PPF)

The rate of interest on PPF was lowered from 8.8 percent to 8.7 per cent with effect from April 1, 2013, according to an RBI notification. The returns from PPF are attractive, if one is in the highest tax bracket. But remember, if you are not paying high amount of taxes, you would be better off with bank deposits, which offer better rates of interest at around 9-9.25 per cent. Also read 7 must know facts about PPF

National Savings Certificate

National Savings Certificates (NSC) are currently offering an interest rate of 8.5 per cent per annum. Investment up to Rs 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act. Interestingly, no TDS is deducted on National Savings Certificate.

Post Office Monthly Savings Scheme

The post office monthly savings schemes are currently offering an interest rates of 8.4 per cent. This scheme is the best for retired employees/Senior Citizens or any one with high sum for investment. The
tenure is 5-years.

Post Office Time Deposits

The rate of interest is 8.20 per cent, 8.20 per cent, 8.30 per cent and 8.40 per cent compounded quarterly for 1,2,3 & 5 years TD account respectively. In case of premature closure of 2 year, 3 year or 5 year account on or after 01.12.2011, if the deposit is withdrawn after the expiry of one year from the date of deposit, interest on such deposits shall be calculated at the rate, which shall be one per cent less than the rate specified for a period of deposit of 1 year, 2 year or 3 years as mentioned.

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