Government increased interest rates on small savings schemes

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Government increased interest rates on small savings schemes
Government increased interest rates on small savings schemes
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Government increased interest rates on small savings schemes

The Centre hiked the interest rates of small savings schemes by up to 70 bps for the April-June 2023 quarter. In a notification, the finance ministry said that the interest rates of schemes like the Senior Citizen Savings Scheme, Monthly Income Savings Scheme, National Savings Certificate, Kisan Vikas Patra, all post office time deposits and Sukanya Samriddhi Account Scheme have been revised. This is the third time in last 9 months, the Centre has increased the interest rates on small savings schemes. At present, the interest rates on small savings schemes range from 4.0 per cent to 8.2 per cent.

A finance ministry statement said interest rates for PPF and savings deposits have been retained at 7.1 per cent and 4 per cent, while those on other savings schemes have been increased between 0.1 per cent and 0.7 per cent.

The interest rate of National Savings Certificate has been increased the most. It will now increase from 7 percent to 7.5 percent for the period from April 1 to June 30, 2023.

The new rate for Sukanya Samriddhi Yojana has been increased from 7.6 percent to 8 percent.

The interest rate on Senior Citizen Savings Scheme and Kisan Vikas Patra (KVP) has been increased to 8.2 percent (from 8 percent) and 7.6 percent (from 7.2 percent).

Only the interest rates on the Public Provident Fund (PPF), Post Office Savings Account have been kept unchanged at 7.1 per cent, 4 per cent, respectively.

Post office savings account offers one of best interest rates in comparison to the public sector banks. While Post office savings account is offering 4 per cent per annum, SBI is offering 2.70 per cent ayear interest rate on its savings account. ICICI Bank is offering 3-3.5 per cent per annum, whereas HDFC Bank is also offering 3-3.5 per cent per annum.