Small Savings Schemes: Govt Likely To Hike Interest Rates For January-March 2024

Even as the RBI earlier this month kept the interest rates on hold for the fifth in a row, the government is expected to revise upwards interest rates on small savings schemes like PPF, NSC, etc, on such schemes for January-March 2024 at the end of this month — December 29. An expert said that going by the G-Sec yields trend, the interest rates on small savings schemes are likely to be raised.

Sunil Sinha, principal economist and senior director (public finance) at India Ratings & Research, said, “Interest rates on small savings schemes like PPF, NSC, etc, are now market-linked and moves in tandem with 10-year G-Sec yield. Therefore, the interest rate paid on these schemes is likely to go up.”

A senior banker has said the government also monitors the country’s liquidity position and inflation before deciding on the interest rates of small savings schemes.

Even as the interest rates on small savings schemes, including PPF, NSC and KVP, are reviewed every quarter,

Currently, interest rates on small savings schemes range between four per cent (post office savings deposits) and 8.2 per cent (Senior Citizens Savings Scheme).

Latest Interest Rates On Small Savings Schemes:

The interest rates for the current quarter January-March 2024 are as follows:

Savings Deposit: 4 per cent

1-Year Post Office Time Deposits: 6.9 per cent

2-Year Post Office Time Deposits: 7.0 per cent

3-Year Post Office Time Deposits: 7 per cent

5-Year Post Office Time Deposits: 7.5 per cent

5-Year Recurring Deposits: 6.7 per cent (6.5 per cent earlier)

National Saving Certificates (NSC): 7.7 per cent

Kisan Vikas Patra: 7.5 per cent (will mature in 115 months)

Public Provident Fund: 7.1 per cent

Sukanya Samriddhi Account: 8.0 per cent

Senior Citizens Savings Scheme: 8.2 per cent

Monthly Income Account: 7.4 per cent.

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.

For the ongoing October-December 2023 quarter, the government kept the interest rates unchanged on small savings schemes, including PPF, Sukanya Samriddhi, Senior Citizens Savings Schemes and post office time deposits, for October-December 2023. Only 5-year recurring deposits saw a hike in interest rate by 20 basis points to 6.7 per cent.