Govt Raises Interest Rates On Small Savings Schemes By Up To 30 bps for July-Sept 2023; Latest Rates – News18

The government on Friday hiked interest rates on some small savings schemes for the July-September 2023 quarter. It has increased 10 basis points (bps) on 1-year and 2-year post office time deposits to 6.9 per cent and 7.0 per cent, respectively, and raised 30 bps on 5-year recurring deposits to 6.5 per cent, according to an official statement. The rates on other schemes remain unchanged.

A basis point is equal to a 100th of a percentage point.

“The rates of interest on various small savings schemes for the second quarter of the financial year 2023-24 starting from July 1, 2023, and ending on September 30, 2023, have been revised,” the finance ministry said in a memorandum on Friday.

Latest Interest Rates On Various Small Savings Schemes for July-September 2023 Quarter:

• Savings Deposit: 4 per cent (4 per cent earlier)
• 1-Year Post Office Time Deposits: 6.9 per cent (6.8 per cent earlier)
• 2-Year Post Office Time Deposits: 7.0 per cent (6.9 per cent earlier)
• 3-Year Post Office Time Deposits: 7 per cent (7 per cent earlier)
• 5-Year Post Office Time Deposits: 7.5 per cent (7.5 per cent earlier)
• 5-Year Recurring Deposits: 6.5 per cent (6.2 per cent earlier)
• National Saving Certificates (NSC): 7.7 per cent (7.7 per cent earlier)
• Kisan Vikas Patra: 7.5 per cent (will mature in 115 months) (7.5 per cent earlier with maturity in 115 months)
• Public Provident Fund: 7.1 per cent (7.1 per cent earlier)
• Sukanya Samriddhi Account: 8.0 per cent (8.0 per cent earlier)
• Senior Citizens Savings Scheme: 8.2 per cent (8.2 per cent earlier)
• Monthly Income Account: 7.4 per cent (7.4 per cent earlier).

Small Savings Schemes 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 (KVP). Social security schemes include Public Provident Fund (PPF), Sukanya Samriddhi Account and Senior Citizens Savings Scheme. The monthly income plan includes the Monthly Income Account.

Interest rates for small savings schemes are notified on a quarterly basis. The rates were increased in the last quarter as well. The interest rates on small savings instruments had remained unchanged for nine consecutive quarters — from the second quarter of 2020-21 to the second quarter of 2022-23.

The RBI has raised the benchmark lending rate by 2.5 per cent since May to 6.5 per cent, prompting banks to raise interest rates on deposits as well. The RBI has maintained the status quo on policy rate in the last two consecutive Monetary Policy Committee (MPC) meetings.