Latest Interest Rates On Small Savings Schemes: After over two years of remaining unchanged, the government has revised upwards the interest rates on small savings schemes, including Kisan Vikas Patra (KVP) and time deposits, up to 30 basis points for October-December 2022. The move comes even as the Reserve Bank of India (RBI) has been raising the repo rate for the past few months, thus pushing up interest rates on various deposits and loans in the country. Here’s all about small savings schemes and their latest interest rates:
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What Are Small Savings Schemes?
These 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. Social security schemes include Public Provident Fund, Sukanya Samriddhi Account and Senior Citizens Savings Scheme. The monthly income plan includes the Monthly Income Account.
Has the Govt Raised Interest Rates For All Small Savings Schemes?
No. Interest rates have been revised upwards for Kishan Vikas Patra (KVP), senior citizens savings scheme, monthly income account scheme, and time deposits for two and three years. The rates have been increased in the range of 10-30 basis points, according to the latest notification by the finance ministry.
Interest rates on other schemes including public provident fund, savings deposits, National Savings Certificates and Sukanya Samriddhi Account Scheme remain unchanged.
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What Are the Latest Interest Rates For Small Savings Schemes?
The post office savings deposits will continue to offer an interest rate of 4 per cent per annum. Time deposits of the 1-year tenure will continue to offer 5.5 per cent interest. Interest on 2-year tenure deposits have been raised by 20 basis points and now stands at 5.7 per cent, and that on 3-year tenure has been raised by 30 basis points and stands at 5.8 per cent. Five-year time deposits gives a return of 6.7 per cent a year. Five-year recurring deposits can earn 5.8 per cent a year of interest.
National Saving Certificates (NSC) and Sukanya Samriddhi Account will also continue to provide the same interest rates — 6.8 per cent and 7.6 per cent, respectively. The interest rate for PPF also remains unchanged at 7.1 per cent.
The government has revised both interest rates and tenure for Kisan Vikas Patra. It now offers 7 per cent for the maturity period of 123 months, compared with the earlier 6.9 per cent for the maturity period of 124 months.
The Monthly Income Account is offering 6.7 per cent per annum interest, against 6.6 per cent earlier.
Last week, the RBI increased the repo rate by 50 basis points to 5.9 per cent, the fourth-time increase in a row. In the past four subsequent monetary policy reviews since May this year, the RBI’s rate-setting panel has raised 190 basis points in total. The repo rate is the interest rate at which the RBI lends to the commercial bank.
