The central government on Friday (30th Dec 2022) hiked interest rates on various small savings schemes including senior citizen savings scheme during the January to March quarter but kept the rate for Public Provident Fund (PPF) and Sukanya Samriddhi scheme unchanged for this period.
The rates on the various instruments have been raised between 20 to 110 basis points and now range from 4.0 % to 7.6%.
The small savings interest rates, while set by the government, are linked to market yields on G-secs with a lag and are reviewed, fixed on a quarterly basis at a spread ranging from 0-100 basis points over (100 basis points = 1 per cent) and above G-Sec yields of comparable maturities, according to the Reserve Bank of India (RBI).
The department of economic affairs under the ministry of finance notified changes in rates in view of the rising interest rate environment. The rate for national savings certificates has been hiked to 7% for Q4, up from 6.8% now.
“The rates of interest on various Small Savings Schemes for the fourth quarter of the 2022-23 starting from 1 January, 2023 have been revised," the office memorandum released by the department of economic affairs said.
The rates for the post office 1 year, 2 year, 3 year, and 5 year time deposits have been hiked to 6.6%, 6.8%, 6.9%, and 7%, from 5.5%, 5.7%, 5.8%, and 6.7% respectively. The rates for 5 year recurring deposits and savings deposits have remained unchanged at 5.8% and 4% respectively.
The rate for senior citizens savings scheme (SCSS)
will earn 8%
from 1 January, compared with 7.6% now
..Source : Mint