Government Increases Small Savings Scheme Interest Rates By Up To 70 Basis Points For April-June 2023; Current Rates

According to a circular released by the finance ministry on Friday, the government has raised interest rates on minor savings schemes, such as post office time deposits, Senior Citizen Savings Schemes (SCSS), and National Savings Certificates (NSC), by up to 70 basis points.

The NSC saw the largest interest rate increase, from 7% to 7.7%, per the circular, while savings deposits and the Public Provident Fund (PPF) did not alter. For April through June 2023, the interest rate on 5-year post office savings increased by 50 basis points to 7.5 percent.

According to a statement from the finance ministry, while the interest rates for popular PPF and savings deposits have remained at 7.1% and 4%, respectively, there has been a rise between 0.1% and 0.7% in other saving plans.

The Sukanya Samriddhi girl child savings program’s new rate has risen from 7.6 percent to 8%.

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.