edited by: Mohammad Haris
Last Update: December 31, 2022, 09:47 AM IST
Small savings schemes are savings instruments including PPF, NSC and post office deposits, which are managed by the government to encourage citizens to save regularly.
Govt hikes interest rates on NSC, Post Office Fixed Deposit, Senior Citizen Savings Scheme for January-March 2023; No change in PPF interest rate
Small Savings Schemes Interest Rate for January-March 2023: Even the interest rates have been revised upwards on all small savings schemesExcept for Sukanya Samriddhi Yojana and Public Provident Fund (PPF), the rate of interest offered on such schemes has become attractive. Now post office FDs are also giving 6.5-7% returns depending on the tenure.
This is the second hike since September 2022, when the government raised interest rates on some small savings schemes for the October-December 2022 quarter, the first hike since January 2019.
Banks have also revised their interest rates on fixed deposits in the last few weeks. IDBI Bank offers 7.60 per cent interest on Retail Amrit Mahotsav Deposit. IDBI Bank has increased the interest rate on deposits and now offers interest up to 7.60 per cent for 700 days only as a limited period offer with effect from December 26, 2022.
State-owned PNB has also increased FD interest rates by 40 basis points to 6.50 per cent on deposit tenures ‘above 3 years and up to 5 years’ and ‘above 5 years and up to 10 years’.
Kotak Mahindra Bank is now offering an interest rate of 7 per cent per annum on recurring deposits (RDs) with tenures between 15 months and 21 months. The private sector bank has increased the RD interest rate by up to 75 basis points for tenors of 6 months, 12 months, 15 months, 18 months and 21 months.
Revised Interest Rates on Small Savings Schemes for January-March 2023:
1-year post office time deposit: 6.5%
2-year post office time deposit: 6.8%
3-year post office time deposit: 6.9 per cent
5-year Post Office Time Deposit: 7.0%
National Savings Certificate (NSC): 7.0 percent
Farmer Vikas Patra: 7.2 percent
Public Provident Fund: 7.1 percent
Sukanya Samriddhi Account: 7.6 percent
Senior Citizen Savings Scheme: 8.0 percent
Monthly Income Account: 7.1 percent.
Small savings schemes are savings instruments managed by the government to encourage citizens to save regularly. There are three categories of small savings schemes – Savings Deposit, Social Security Scheme and Monthly Income Scheme.
Savings deposits include 1-3 years time deposits and 5 years recurring deposits as well as savings certificates such as National Savings Certificate (NSC) and Kisan Vikas Patra. Social security schemes include Public Provident Fund, Sukanya Samriddhi Account and Senior Citizen Savings Scheme. Monthly Income Plan includes Monthly Income Account.
From May this year the Reserve Bank of India The Reserve Bank of India (RBI) has increased the key repo rate by 225 basis points, prompting banks to raise interest rates on deposits as well. On 7 December, the RBI increased the repo rate by 35 basis points to 6.25 per cent, its fifth consecutive increase. Repo rate is the interest rate at which RBI lends to commercial banks.
In September 2022, interest rates were revised upward for Kisan Vikas Patra (KVP), Senior Citizen Savings Scheme, Monthly Income Account Scheme, and fixed deposits for two and three years for the January-March 2023 quarter. Rates were increased in the range of 10-30 basis points.
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