Govt hikes interest rates on small savings schemes w.e.f. 01.10.2022
The government raised the interest rate for the Senior Citizen Savings Scheme by 20 basis points (bps), or from 7.4 to 7.6, and for the Monthly Income Account Scheme by 10 bps, or from 6.6 to 6.7. The interest rate of other schemes like the Public Provident Fund (PPF), Saving deposit scheme, National saving certificate, and Sukanya Samriddhi Yojana remained unchanged.
The Central government has announced to raise the interest rate of small savings schemes for Q3(from October 1 to December 31, 2022). The rate of interest on Kisan Vikas Patra has also been increased by 10 bps to 7% from 6.9% and the maturity months have decreased by one month (earlier it was 124 months which is decreased to 123 months now). The 2-year time deposit and 3-year time deposit with the post office’s interest rate were also increased by 20 bps from 5.5 to 5.7 and 30 bps from 5.5 to 5.8 respectively.
The government raised the interest rate for the Senior Citizen Savings Scheme by 20 basis points (bps), or from 7.4 to 7.6, and for the Monthly Income Account Scheme by 10 bps, or from 6.6 to 6.7, in a memo issued on September 29. The interest rate of other schemes like the Public Provident Fund (PPF), Saving deposit scheme, National saving certificate, and Sukanya Samriddhi Yojana remained unchanged.
The undersigned is directed to say that, vide memorandum No. 01/04/2019-NS dated 29.09.2022 (copy enclosed), Government of India, Ministry of Finance, Department of Economic Affairs (Budget Division) has informed that the rate of interest on various Small Savings Schemes (National Savings Schemes) for the third quarter of financial year 2022-23 (starting from 1st October, 2022 and ending on 31st December, 2022) have been revised as under.
|
SL No. |
Instrument I Scheme |
Rate of Interest from 01.07.2022 to 30.09.2022 |
Rate of Interest from 01.10.2022 to 31.12.2022 |
|
1. |
Post Office Savings Account |
4.0 |
4.0 |
|
2. |
1Year Time Deposit |
5.5 |
5.5 |
|
3. |
2 Year Time Deposit |
5.5 |
5.7 |
|
4. |
3 Year Time Deposit |
5.5 |
5.8 |
|
5. |
5 Year Time Deposit |
6.7 |
6.7 |
|
6. |
5 Year Recurring Deposit |
5.8 |
5.8 |
|
7. |
Senior Citizen Savings Scheme |
7.4 |
7.6 |
|
8. |
Monthly Income Account Scheme |
6.6 |
6.7 |
|
9. |
Sukanya Samriddhi Account Scheme |
7.6 |
7.6 |
|
10. |
Public Provident Fund Scheme |
7.1 |
7.1 |
|
11. |
National Savings Certificate |
6.8 |
6.8 |
|
12. |
Kisan Vikas Patra |
6.9 (will mature in 124 months) |
7.0 (will mature in 123 months) |
The Reserve Bank of India has hiked the benchmark lending rate by 190 basis points since May to control runaway inflation. It has prompted banks to hike interest rates on deposits as well. The small savings interest rates are linked to market yields on government securities.
What are Small Savings Schemes?
They are created to facilitate safe and attractive investment options to the public and at the same time mobilise resources for development. The umbrella of small saving schemes includes saving deposits, post office deposits, public provident fund, senior citizen saving scheme, monthly income account scheme, Five-year recurring deposit scheme, National Saving Certificate, Kisan Vikas Patra and Sukanya Samriddhi Yojana.