New Delhi, Mar 31, 2023: The government has increased interest rates on small savings schemes, including post office time deposit, Senior Citizen Savings Scheme (SCSS) and National Savings Certificate (NSC), by up 70 basis points, according to a circular issued by the finance ministry on Friday.
According to the circular, the highest interest rate hike was made in the NSC from 7 per cent to 7.7 per cent now, while Public Provident Fund (PPF) and savings deposits saw no change. The interest rates on 5-year post office deposits was hiked by 50 basis points to 7.5 per cent for April-June 2023.
While the interest rates for popular PPF and savings deposits have been retained at 7.1 per cent and 4 per cent, respectively, there has been an increase between 0.1 per cent and 0.7 per cent in other saving schemes, a finance ministry statement said.
The new rate for the girl child savings scheme Sukanya Samriddhi has been increased to 8 per cent from 7.6 per cent.
On Kisan Vikas Patra, the interest rate for the June 2023 will be 7.5 per cent and will mature in 115 months. Earlier in the March 2023 quarter, it was 7.2 per cent earlier with maturity in 120 months.
Latest Interest Rates On Various Small Savings Schemes for June 2023 Quarter:
Savings Deposit: 4 per cent (4 per cent earlier)
1-Year Post Office Time Deposits: 6.8 per cent (6.6 per cent earlier)
2-Year Post Office Time Deposits: 6.9 per cent (6.8 per cent earlier)
3-Year Post Office Time Deposits: 7 per cent (6.9 per cent earlier)
5-Year Post Office Time Deposits: 7.5 per cent (7 per cent earlier)
National Saving Certificates (NSC): 7.7 per cent (7 per cent earlier)
Kisan Vikas Patra: 7.5 per cent (will mature in 115 months) (7.2 per cent earlier with maturity in 120 months)
Public Provident Fund: 7.1 per cent (7.1 per cent earlier)
Sukanya Samriddhi Account: 8.0 per cent (7.6 per cent earlier)
Senior Citizens Savings Scheme: 8.2 per cent (8 per cent earlier)
Monthly Income Account: 7.4 per cent (7.1 per cent earlier).
Small Savings Schemes are savings instruments managed by the government to encourage citizens to save regularly. The small savings schemes have three categories — savings deposits, social security schemes and monthly income plan.
Saving deposits include 1-3-year time deposits and 5-year recurring deposits. These also include saving certificates such as National Saving Certificates (NSC) and Kisan Vikas Patra (KVP). Social security schemes include Public Provident Fund (PPF), Sukanya Samriddhi Account and Senior Citizens Savings Scheme. The monthly income plan includes the Monthly Income Account.
Interest rates were increased in the last quarter as well. Interest rates for small savings schemes are notified on a quarterly basis.
The Reserve Bank since May has raised the benchmark lending rate by 2.5 per cent to 6.5 per cent, prompting banks to raise interest rates on deposits as well.
The RBI raised the repo rate or short-term lending rate by 25 basis points last month. This was the sixth consecutive rate hike after a 40 basis points increase in May and 50 basis points hike each in June, August and September. In all, the RBI has raised the benchmark rate by 2.5 per cent since May last year.