Govt Raises Interest Rates On Senior Citizen Savings Scheme (SCSS) & Post Office Fixed Deposits

The government on Thursday raised rates on some small savings schemes by up to 30 basis points (bps) in line with the hardening interest rate in the economy.

With the revision, a three-year time deposit with post offices would earn 5.8 per cent from the existing 5.5 per cent, an increase of 30 basis points for the third quarter of the current financial year.

Senior Citizen Savings scheme will earn 20 basis points more to 7.6 per cent from the existing rate of 7.4 per cent during the October-December period, a finance ministry notification said, PTI reported.

With regard to Kisan Vikas Patra, the government has revised both tenure and interest rates.

The Reserve Bank since May has raised the benchmark lending rate by 140 basis points, prompting banks to raise interest rates on deposits as well.

The Central Government has revised the interest rate on modest savings schemes for the third quarter. According to the this modification, a three-year time deposit with a post office would earn 5.8 percent instead of the current 5.5 percent, a rise of 30 basis points for the third quarter of the current fiscal year.

Senior Citizen Savings scheme will now earn 20 basis points more to 7.6 per cent from the existing rate of 7.4 per cent during the October-December period, a notification from the finance ministry said.

The Reserve Bank of India (RBI) since May has raised the benchmark lending rate by 140 basis points, prompting banks to raise interest rates on deposits as well.

Meanwhile, RBI is expected to boost interest rates once more. Following a 40-basis-point increase in May, the RBI raised interest rates by another 50 basis points in August in an effort to combat inflation. According to a Reuters report, the RBI is widely expected to hike interest rates at its September 30 meeting. The repo rate is the interest rate at which the RBI lends short-term cash to banks.