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Interest rate hikes: Rates for govt small savings schemes changed after more than 2 years

Interest rate hikes: Rates for govt small savings schemes changed after more than 2 years

But the government hasn’t changed the interest rates for the popular schemes -- Public Provident Fund (PPF), National Savings Certificate and Sukanya Samriddhi Scheme.

The interest rate on small savings schemes was last revised during the first quarter of 2020-21, when rates were slashed due to pandemic-related issues. The interest rate on small savings schemes was last revised during the first quarter of 2020-21, when rates were slashed due to pandemic-related issues.

The interest rates on five small savings schemes run by the government have been increased by 10 to 30 basis points this quarter after almost nine quarters. These schemes include the Senior Citizen Saving Scheme, Kisan Vikas Patra, and Monthly Income Scheme. The interest rates for government small savings schemes are revised on a quarterly basis. The interest rate on small savings schemes was last revised during the first quarter of 2020-21, when rates were slashed due to pandemic-related issues. 

But the government hasn’t changed the interest rates for the popular schemes -- Public Provident Fund (PPF), National Savings Certificate and Sukanya Samriddhi Scheme.  

Interest rate changes 

With the Q3 revision of interest rates, investors opting for the three-year time deposit with post offices would get 5.8 per cent from now on instead of the 5.5 per cent, which is an increase of 30 basis points. 

Also read: ICICI Bank hikes FD interest rates by 10-25 bps on select tenors for retail investors after RBI increases its repo rate

The investors who are putting their money in the Senior Citizen Savings scheme will earn 7.6 per cent, a 20 basis points hike from the existing rate of 7.4 per cent in Q3. 

The government has tweaked both the tenure and interest rates for those buying Kisan Vikas Patra (KVP). The revised rate for KVP has been fixed at 7 per cent and the maturity period is 123 months. Earlier, the interest rate was 6.9 per cent and the maturity period was 124 months. 

For Monthly Income Scheme, investors can now earn an interest of 6.7 per cent as compared to existing 6.6 per cent. 

Interest rate unchanged 

The interest rates of popular schemes like Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to be 7.1 per cent and 6.8 per cent, respectively, in the October-December quarter of this fiscal. 

As per the Finance ministry notification, the one-year term deposit scheme of the post office will earn the investor an interest rate of 5.5 per cent in Q3 just as before. 

Also read: PPF scheme: Why it's still one of the best investment options

The term deposits of five years will fetch an interest rate of 6.7 per cent, which are paid quarterly. The interest rate for the five-year recurring deposits will be  5.8 per cent. 

For the girl child savings scheme Sukanya Samriddhi Yojana, the interest rate will be same 7.6 per cent. The basic savings deposits at the post office will continue to earn 4 per cent per annum. 

In a separate notification, the finance ministry said if a Senior Citizens' Savings Scheme (SCSS) account holder passes away, the account will be closed on request of the nominee/legal heir. In such cases, the rate of interest as applicable on SCSS scheme would be paid till the date of demise of the account holder. 

Published on: Oct 01, 2022, 9:34 AM IST
Posted by: Basudha Das, Oct 01, 2022, 9:29 AM IST