The government on Friday revised interest rates on small savings schemes for the January-March 2023 quarter. It has hiked interest rates on NSC, post office term deposits, senior citizen savings scheme from January 1. However, there is no change in interest rates on Public Provident Fund (PPF) and girl child savings scheme Sukanya Samriddhi.
This is the second hike since September 2022, when the government raised interest rates on some small savings scheme for the October-December 2022 quarter. It was the first hike after January 2019. The interest rates were revised upwards for Kisan Vikas Patra (KVP), senior citizens savings scheme, monthly income account scheme, and time deposits for two and three years. The rates were increased in the range of 10-30 basis points.
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, as well as saving certificates such as National Saving Certificates (NSC) and Kisan Vikas Patra. Social security schemes include Public Provident Fund, Sukanya Samriddhi Account and Senior Citizens Savings Scheme. The monthly income plan includes the Monthly Income Account.
Revised Interest Rates On Small Savings Schemes For January-March 2023:
1-Year Post Office Time Deposits: 6.5 per cent
2-Year Post Office Time Deposits: 6.8 per cent
3-Year Post Office Time Deposits: 6.9 per cent
5-Year Post Office Time Deposits: 7.0 per cent
National Saving Certificates (NSC): 7.0 per cent
Kisan Vikas Patra: 7.2 per cent
Public Provident Fund: 7.1 per cent
Sukanya Samriddhi Account: 7.6 per cent
Senior Citizens Savings Scheme: 8.0 per cent
Monthly Income Account: 7.1 per cent.
Since May this year, the Reserve Bank of India (RBI) has raised the key repo rate by 225 basis points, prompting banks to raise interest rates on deposits as well. On December 7, the RBI increased the repo rate by 35 basis points to 6.25 per cent, the fifth-time increase in a row. The repo rate is the interest rate at which the RBI lends to the commercial bank.
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