Government hikes interest rate for Kisan Vikas Patra, Senior Citizens’ Savings scheme, and others

The government has effected minor hikes of 0.1% to 0.3% in the interest rates payable on five small savings instruments, including the Kisan Vikas Patra, Senior Citizens’ Savings scheme and time deposits for 2 and 3 years, for the quarter beginning October 1.

While the return payable on Public Provident Fund (PPF) accounts has been retained at 7.1%, the interest rate for Kisan Vikas Patra has been hiked from 6.9% to 7% for the coming quarter and the Senior Citizens’ Savings will now earn 7.6% from the 7.4% rate valid till September 30.

Returns on the monthly income account scheme have been raised from 6.6% to 6.7%, 2-year time deposits will earn 5.7% instead of 5.5%, and 3-year time deposits will see the highest increase of 0.3% to fetch 5.8% from 5.5% currently.

This is the first time small savings rates have been hiked since the January to March quarter of 2019, just ahead of the last Lok Sabha elections. The rates had been kept unchanged since the April to June quarter of 2020 when they were slashed across schemes.

Rates were left unchanged for seven other designated small savings schemes, including the Public Provident Fund (PPF) at 7.1%, Sukanya Samriddhi Account Scheme at 7.6%, National Savings Certificate (6.8%) as well as five-year recurring and time deposits (5.8% and 6.7%, respectively). Returns on savings deposits and one-year time deposits were also kept static at 4% and 5.5%.