When it comes to small savings schemes, India Post's Sukanya Samriddhi Yojana is the best in terms of returns. In the Sukanya Samriddhi Yojana, the depositor will get a yearly interest rate of 7.6%. This interest rate is way more than that of FD, NSC, Monthly Income Scheme, KVP, or RD schemes.

In other words, if you want to invest peanuts and get loads of money after some time, Sukanya Samriddhi Yojana is the way to go.

In Sukanya Samriddhi Yojana (SSY), a person has to deposit at least 250 rupees monthly while the maximum deposit limit is 1.5 lakh rupees.

Because the scheme is availed by India Post, your money will be secure in the hands of the government. Not only that, there is also a 100% guarantee of returns. Because the India Post comes directly under the central government, this guarantee is given by the central government itself.

In this scheme, once your interest gets locked, you will get the return accordingly. The parents will have to invest the sum for a period of 14 years, while the maturity period of the scheme is 21 years. The remaining 7 years will get a yearly interest rate of 7.6 % on the closing balance of the first 14 years.

Rs. 15 Lakh Return On Deposit Of Rs. 9 Lakh

For current quarters, the interest rate of SSY is set at 7.6%. Suppose the interest remains the same, and you deposit Rs. 3,000 monthly or Rs. 36,000 yearly for 14 consecutive years. At a compound interest rate of 7.6 percent, this sum will amount to Rs. 9,11,574.

After the completion of the first 14 years, the compound interest rate will turn into a yearly interest rate. For the next 7 years, a yearly interest rate of 7.6% will apply to these Rs. 9,11,574. After the maturity period of 21 years, you will get a return of Rs. 15,22,221.

How Much Profit Can You Make

You can deposit a maximum of 12,500 rupees monthly or 1.5 lakh rupees yearly. You will have to keep depositing the same amount for the next 14 years. As per your compound interest, this sum will amount to 37,98,225 rupees. After another 7 years of yearly 7.6% interest rate, you will get a return of 63,42,589 rupees.

Earlier, the minimum monthly deposit sum was set to 1,000 rupees, but it has been reduced to 250 rupees monthly only. Not only can you earn money by high-interest rates, but you will also save your hard-earned income in terms of taxes. According to Act 80C of Income Tax Rules, the money you will deposit in SSY will be exempted from tax.

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The State Bank of India has again changed the fixed deposit interest rates by 40 basis points. The bank made the announcement through their official website, stating that the changes will be effective from May 27. This is the second time in May that SBI has made the cuts in FD rates.

As per the financial pundits, this decision will impact those depositors who were planning to renew their FDs in the coming months. Now, the one-year SBI FD rate stands at 5.10 per cent. This is lower than before. Earlier, the one-year SBI FD rate of interest was at 5.50 per cent.

New FD rates For General Public:

·     7 days to 45 days - 2.9%

·     46 days to 179 days - 3.9%

·     180 days to 210 days - 4.4%

·     211 days to less than 1 year - 4.4%

·     1 year to less than 2 years - 5.1%

·     2 years to less than 3 years - 5.1%

·     3 years to less than 5 years - 5.3%

·     5 years and up to 10 years - 5.4%

New FD Rates For Senior Citizens

Amidst the changes, only senior citizens are getting some benefits. SBI has introduced a special “SBI Wecare” Deposit for Senior Citizens. The step was taken to protect senior citizens in the tough time.

As per the new scheme, an additional 30bps premium will be available for the senior citizen’s Retail term deposits with “5 Years and above” tenor only. However, this will remain in effect only up to September 30, 2020.

Here are the FD rates for senior citizens:

·     7 days to 45 days - 3.4%

·     46 days to 179 days - 4.4%

·     180 days to 210 days - 4.9%

·     211 days to less than 1 year - 4.9%

·     1 year to less than 2 years - 5.6%

·     2 years to less than 3 years -5.6%

·     3 years to less than 5 years - 5.8%

·     5 years and up to 10 years - 6.2%

The Takeaway

Earlier on May 12, SBI had cut the interest rates on term deposits of up to 3 years tenor by 20bps. The bank had also slashed the interest rates on FD twice in the month of March.

With RBI cutting the repo rates, it is expected that the conditions might go sour. The bank fundings are also falling and this may lead to further decrease in the interest rates on fixed deposits raising concerns among people.

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Just a week ago, the State Bank of India (SBI) announced a special fixed deposit (FD) scheme for senior citizens. The interest rates are higher, tenure is low, and there are some other benefits. But, to give it a tough competition, India's one of the largest private banks - ICICI bank – has rolled out a special FD scheme for senior citizens.

What it is, and how can you get the maximum benefits; here are all the things you need to know about:

'ICICI Bank Golden Years FD'

This new FD scheme is named 'ICICI Bank Golden Years FD' by the bank. The scheme offers an interest rate of 6.55% per annum for deposits up to Rs 2 crore. The tenure of this deposit can be anywhere between more than 5 years to 10 years.

The most appreciable thing about the scheme is its interest rate. The scheme offers 80 basis points (bps) to the senior citizens, which is way higher than that of the general public (non-senior citizens) or the earlier rate provided to senior citizens. ICICI bank used to offer 50 bps to the senior citizens. But now, the FD has jumped to 80 bps with a single leap.

Talking to the media about this new scheme, Pranav Mishra, Head – Liabilities Group, ICICI Bank, said, "We at ICICI Bank have always valued our relationship with senior citizens. We know that FD interest is a key source of income for a large section of senior citizens. Keeping this in mind, we are offering higher interest rates to them through the new scheme, even in the declining interest rate regime, as a mark of our respect to them. We believe that this scheme will help them to create a good pension kitty on their long-term deposit and thereby enhance their convenience."

Some important points to note:

● The scheme is applicable to both new and the old FDs. If any customer already has a similar scheme in the past, he/she can renew the FD plan to the latest one. However, an old FD can only be renewed if its amount is less than Rs 2 crore singularly.

● The 'ICICI Bank Golden Years FD' is only available from May 20 to September 30, 2020.

● Customers can take a loan against their FD. The principal amount of loan can be up to 90% of principal and accrued interest of FD.

● Customers can also get a Credit Card against FD. Though, the interest rate on this credit is not cleared yet by the bank.

If you are interested in the scheme, you can open a Fixed Deposit using the ICICI bank's official app for net-banking and mobile banking. However, if the internet is not your preferred way, you can go to your nearest ICICI Bank branch.

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