SBI hopeful Indian Inc to look homeward for loans

The public is now days going for other options of investment than going for small savings schemes announced by the government the main reason behind this is the low interest rates on these instruments.

For example, State Bank of India is offering a return of 8.5% on five-year deposits along with Section 80C benefits. The return on a five-year POTD scheme, however, is only 7.5%.
In the current financial year five-year fixed deposit schemes of banks, have been brought under Section 80C, in which some benefits have been given specially for the senior citizens. According to the clause under Section 80C the senior citizen will get the benefit of tax extension. The citizens whose age is above 60 or above 55 years who have opted for early retirement will be able to get the relief under the saving scheme. You may get a complete information for SBI fixed deposit scheme here also check their eligibility criteria.

Under the scheme, a senior citizen can invest up to Rs 15 lakh for a minimum period of five years. The return given by the government on the scheme is 9%.

Under section 80C, an investment up to Rs 1 lakh in instruments like PPF, National Savings Certificate, POTD and five-year bank fixed deposits are deducted from the taxable income of the depositors to calculate their tax liabilities.

Equity-linked savings schemes and insurance premium have also been included in this scheme. There has been boom in the share market for the last four years, equity-linked savings scheme of mutual funds and insurance have emerged as popular instruments.

In POMIA, one can invest up to Rs 4.50 lakh for six years and can use it as a monthly income scheme. The depositors will get a monthly income at the rate of 8% per annum. At the same time, on maturity after 6 years, they will get 5% of the principal amount they deposited.

But as the scheme has not been included in tax benefit schemes, neither the deposited amount nor the interest income is tax-exempted.