Small Saving Schemes Interest Rates Hiked by up to 70 bps for June 2023 Quarter

For the April-June 2023 quarter, the government has increased the interest rates on small saving schemes by up to 70 basis points. This information was released by the finance ministry in a circular on March 31, 2023. (100 basis points are equal to one percentage point.) Interest rates have increased for programmes including the Sukanya Samriddhi Account Plan, Monthly Income Savings Scheme, National Savings Certificate, Kisan Vikas Patra, Senior Citizen Savings Scheme, and all post office time deposits. The Public Provident Fund (PPF) interest rate has once again remained constant at 7.1%.

Look at the interest rates for the first quarter of FY 2023-24 for the various modest savings programmes

• 4% for savings deposits (4 percent earlier)
• Time Deposits at the Post Office for One Year: 6.8% (6.6 percent earlier)
• Time Deposits at the Post Office for Two Years: 6.9% (6.8 percent earlier)
• Time Deposits at the Post Office for Three Years: 7% (6.9 percent earlier)
• Time Deposits at the Post Office for Five Years: 7.5% (7 percent earlier)
• NSCs (National Savings Certificates): 7.7% (7 percent earlier)
• Kisan Vikas Patra: 7.5 percent with maturity in 115 months ( Earlier 7.2 percent with maturity in 120 months)
• Public Provident Fund: 7.1 percent same as earlier
• Sukanya Samriddhi Account: 8% (7.6 percent earlier)
• Senior Citizens Savings Program: 8.2% (8 percent earlier)
• Monthly income account 7.4% (7.1 percent earlier)

Government-run savings programmes called "Small Savings Schemes" are intended to encourage people to save money on a regular basis. There are three different kinds of small savings programmes: social security plans, monthly income plans, and savings deposits. Examples of savings accounts are 1-3 year time deposits and 5-year recurring deposits. Savings vehicles like Kisan Vikas Patra and National Savings Certificates (NSC) are also featured (KVP). Public Provident Fund (PPF), Sukanya Samriddhi Account, and Older Citizens Savings Program are examples of social security systems.
Moreover, in the most recent quarter, interest rates increased. Every three months, interest rates for small savings schemes are released. Banks have raised their interest rates on deposits as a result of the Reserve Bank's 2.5% hike in the benchmark lending rate since May to 6.5%.
The RBI last month raised the short-term lending rate, often known as the repo rate, by 25 basis points. This was the sixth rate increase in a row, following increases of 40 basis points in May and 50 basis points in each of the following months of June, August, and September. The RBI has raised the benchmark rate by a total of 2.5% since May of last year.