Govt raises interest rates on 8 small savings schemes including NSC and senior citizen savings

The government on Friday raised interest rates on most post office savings schemes that do not get income tax benefits in line with the firming of interest rates in the economy.

Rates National Savings Certificate (NSC), senior citizen savings scheme, and Kisan Vikas Patra (KVP), where income accruing is taxable have been hiked by up to 1.1 percentage points, according to a finance ministry notification. However, the interest rate for the popular Public Provident Fund and girl child savings scheme Sukanya Samriddhi were unchanged.

Second quarter of increase in interest rates

This is the second quarter of increases in a row in interest rates for some schemes, following nine quarters of unchanged rates.

Interest rates for small savings schemes are notified on a quarterly basis.

With the revision, a one-year term deposit with post offices would earn interest at the rate of 6.6 per cent, for two years (6.8 per cent), three years (6.9 per cent) and five years (7 per cent).

Interest up for Senior citizens savings scheme, Kisan Vikas Patra

The Senior Citizen Savings scheme will earn 40 basis points more at 8 per cent during the January-March period, the notification said.

The government has hiked the interest rate of the Kisan Vikas Patra (KVP) to 7.2 per cent, thereby maturing in 120 months. At present, KVP yields 7 per cent rate with a maturity period of 123 months.

The Monthly Income Scheme would earn 40 basis points more at 7.1 per cent, while the interest rate for NSC has been raised by 20 basis points to 7 per cent.

The interest rate on Sukanya Samriddhi Yojana and PPF have been kept unchanged at 7.6 per cent and 7.1 per cent respectively. Savings deposits will continue to earn 4 per cent per annum.

Published on: Friday, December 30, 2022, 09:18 PM IST