The central government on Thursday decided to keep interest rates unchanged on small savings schemes, including Sukanya Samriddhi Yojana, Senior Citizens Savings Scheme or Public Provident Fund (PPF), for the July-September 2022 quarter. It is the ninth time in a row that the interest rates on these schemes have not changed.
Interest rates on small saving schemes are reviewed on a quarterly basis. The revision happens in line with the movement in benchmark government bonds of similar maturity.
“The rates of interest on various small savings schemes for the second quarter of the financial year 2022-23, starting from July 1, 2022, and ending on September 30, 2022, shall remain unchanged from those notified for the first quarter (April 1, 2022, to June 30, 2022) for FY 2022-23,” the finance ministry said in a statement.
What Are Small Savings Schemes?
Small Savings Schemes are savings instruments managed by the government to encourage citizens to save regularly. The 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.
What Will Be Latest Interest Rates On Small Savings Schemes?
As the interest rates have been kept unchanged, these schemes will continue to offer the same rate during July-September 2022 as the previous quarter.
The post office savings deposits will now continue to offer an interest rate of 4 per cent per annum. Time deposits of the tenure 1-3 years will be offering the same 5.5 per cent per annum. Five-year time deposits will give a return of 6.7 per cent a year. Five-year recurring deposits can earn 5.8 per cent a year interest.
National Saving Certificates (NSC) and Kisan Vikas Patra are currently offering annual interest rates of 6.8 per cent and 6.9 per cent, respectively.
Public Provident Fund, Sukanya Samriddhi Account, and Senior Citizens Savings Scheme are earning annual returns of 7.1 per cent, 7.6 per cent and 7.4 per cent, respectively.
The Monthly Income Account is offering 6.6 per cent per annum interest.
Earlier in June, the government approved a four-decade-low interest rate of 8.1 per cent on employee provident fund (EPF) deposits for 2021-22. The 8.1 per cent EPF interest rate is the lowest since 1977-78, when it stood at 8 per cent.
In the past few weeks, several banks, including State Bank of India, Punjab National Bank and ICICI Bank, have increased their interest rates on fixed deposits even as the RBI’s Monetary Policy Committee raised its key repo rate by 90 basis points in two hikes within a month.
It is expected to do so further in order to control inflation in the country. The retail inflation in India stood at 7.04 per cent in May, which was lower than the 7.79 recorded in April but is still above the central bank’s target limit of 2-6 per cent.