Interest rates of post office savings schemes hiked; PPF and Sukanya Samriddhi rates unchanged, says Finance Ministry

The government has hiked the interest rates of a few small savings schemes by between 20 bps and 110 bps for the January-March 2023 quarter

PGurus Newsdesk

December 30, 2022

The government has hiked the interest rates of a few small savings schemes by between 20 bps and 110 bps for the January-March 2023 quarter

Changed interest rates would be applicable between Janu 1, 2023, and Mar 31, 2023

On Friday the Centre hiked interest rates on post office savings schemes, national saving certificate (NSC), senior citizen savings scheme, and the Kisan Vikas Patra (KVP). Normally, interest rates for small saving schemes are revised every quarter.

However, interest rates for Public Provident Fund (PPF) and Sukanya Samriddhi Yojana have been kept unchanged at 7.1 percent and 7.6 percent, respectively.

Rates for deposits up to 5 percent as well as NSC, senior citizen savings scheme, and KVP have been hiked by up to 1.1 percentage points, according to a Finance Ministry notification.

The changed interest rates would be applicable between January 1, 2023, and March 31, 2023.

With the latest revision, a one-year term deposit with post offices would earn 6.6 percent interest, for two years deposit, it will earn 6.8 percent interest, for three years deposit, it will earn 6.9 percent interest, while for a five years deposit the interest earned would be 7 percent, the notification said.

Senior Citizen Savings scheme will earn 40 basis points more at 8 percent during the January-March period, it added.

For KVP, the government has hiked the interest rates to 7.2 percent, though on a reduced maturity period of 120 months. Currently, KVP has an interest rate of 7 percent on a maturity period of 123 months.

The monthly Income Scheme would earn 40 basis points more at 7.1 percent, while the NSC interest rate has been raised by 20 basis points to 7 percent. Savings deposits will continue to earn a 4 percent per annum interest rate.

The Reserve Bank of India since May this year has raised the repo rate five times, thus allowing banks to raise interest rates on deposits.

This is the second straight quarter when interest rates have been hiked for select schemes. Prior to October 1, 2022, there was no change in interest rates for these schemes for nine consecutive quarters.

[With Inputs from IANS]

PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views

For all the latest updates, download PGurus App.