Loan on saving schemes: The government had recently taken a big decision that there will be no change in the interest rates on small savings schemes for the July to September quarter. This year, from the second quarter i.e. from July 1, 2021 to September 30, 2021, the interest on small savings schemes will remain the same. At the time of Corona epidemic, the government has given this decision as a relief for small savings plans and middle class people.
Can take loan when needed
Small Savings Schemes are one of the most popular debt investment options for Indians. Not only do they offer higher interest rates for long-term investments, but some of these also come in handy in case of financial emergencies.
National Savings Certificate
It is a five-year product which gives 6.8 per cent interest. The minimum amount that you can invest in NSC is Rs 1,000 while there is no maximum investment limit. It can be bought for Rs 1000 and its multiples. However, only investment up to Rs 1.5 lakh in this will be eligible for tax deduction under section 80C. It can be purchased from any post office. NSC earns interest annually but it is payable only on maturity.
Loan up to 85% of the value
According to the website of Bank of Baroda, if the remaining maturity period is less than three years, then the loan can be availed up to 85 percent of the value of these two small savings schemes. If the residual maturity is more than three years, then the loan can be availed up to 80 percent of the value. A person can also pledge these securities for overdraft.
Around 11.9% interest rate
According to the website of State Bank of India, about 11.9% interest rate is charged for the loan. An investor can pledge these only to banks, non-banking financial companies, public and private corporations, government companies and local authority institutions.
