Even as the interest rates in the country are prevailing at the highest rates, fixed-income instruments have also become attractive investment avenues. These include bank fixed deposits, PPF, national savings certificates, post office deposits and Senior Citizens Savings Schemes, among others. When it comes to interest rates, the Senior Citizens Savings Scheme is offering yearly interest of 8.2 per cent, bank FDs are offering up to 7.75 per cent, while post office time deposits are giving up to 7.5 per cent annual interest rate. PPF offers 7.1 per cent interest rate.
Among large banks, HDFC Bank is offering up to 7.75 per cent interest rates on FD, depending upon deposit tenure and depositor’s age. SBI is offering FD rates up to 7.50 per cent annually and PNB is giving up to 7.75 per cent a year.
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).
The government will revise interest rates on such schemes for October-December 2023 at the end of this month — September 29 or September 30. An expert said that going by the G-Sec yields trend, the interest rates on small savings schemes are likely to remain unchanged.
Paras Jasrai, senior analyst at India Ratings & Research, said, “The interest rates on these schemes (small savings schemes) are decided on the previous quarter’s trend of G-Sec (government securities) yield. The 10-year G-Sec has ranged between 7.0 per cent and 7.2 per cent in the current fiscal so far, and is expected to be around 7.1 per cent-7.2 per cent, as inflation is expected to be in the range of 5-6 per cent post September 2023. So, the interest rates on small savings schemes are likely to be unchanged.”
What Are Small Savings Schemes?
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.
What Are The Current Interest Rates On Small Savings Schemes?
The interest rates for the current quarter July-September 2023 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: 6.5 per cent
- 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.
In the last review on June 30, 2023, the government hiked interest rates on several small savings schemes — 1-year & 2-year post office time deposits and 5-year recurring deposits. It was the fourth hike since September 2022, when the government raised interest rates on some small savings schemes for the October-December 2022 quarter, after keeping it unchanged for nine consecutive quarters — from the second quarter of 2020-21 to the second quarter of 2022-23.
Comments
0 comment