Govt hikes interest rates on most small savings schemes

New Delhi, March 31 The government on Friday raised interest rates on most post office savings schemes by up to 0.7% for the April-June 2023 quarter in line with the firming of interest rates in the economy. While the interest...

PTI

Updated At : 02:33 PM Apr 01, 2023 IST

New Delhi, March 31

The government on Friday raised interest rates on most post office savings schemes by up to 0.7% for the April-June 2023 quarter in line with the firming of interest rates in the economy.

While the interest rates for popular PPF and savings deposits have been retained at 7.1% and 4%, respectively, there has been an increase between 0.1% and 0.7% in other savings schemes, a Finance Ministry statement said.

Senior Citizen Savings Scheme to fetch 8.2%
The highest increase was in the interest rate of the National Savings Certificate, which will now attract 7.7%, up from 7%, for the April 1 to June 30, 2023 period
The new rate for the girl child savings scheme Sukanya Samriddhi has been increased to 8% from 7.6%
The interest rate on the Senior Citizen Savings Scheme and Kisan Vikas Patra is 8.2% (up from 8%) and 7.5% (up from 7.2%), respectively

The highest increase was in the interest rate of the National Savings Certificate (NSC), which will now attract 7.7%, up from 7%, for the April 1 to June 30, 2023 period.

The new rate for the girl child savings scheme Sukanya Samriddhi has been increased to 8% from 7.6%.

The interest rate on the Senior Citizen Savings Scheme and Kisan Vikas Patra (KVP) is 8.2% (up from 8%) and 7.5% (up from 7.2%), respectively. KVP will now mature in 115 months as against 120 months earlier.

Interest rates were increased in the last quarter as well. Interest rates for small savings schemes are notified on a quarterly basis.

With the revision, a one-year term deposit with post offices would earn 6.8% (up from 6.6%), for two years — 6.9% (up from 6.8%), three years — 7% (up from 6.9%) and five years — 7.5% (up from 7%).

The interest rate on Public Provident Fund (PPF) has been retained at 7.1% and that of the savings deposit at 4%. The interest rate on Monthly Income Scheme has been increased by 30 basis points to 7.4%.

The Reserve Bank since May has raised the benchmark lending rate by 2.5% to 6.5%, 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% since May last year.