Small savings scheme: Know interest rate on PPF, SSY, NSC from April 1
The Central Government has increased the interest rates of small savings schemes including Senior Citizen Savings Scheme and Time Deposit. This increase in interest rates will be applicable from April 1, 2023. Interest rates on National Savings Certificate, Monthly Income Scheme and Kisan Vikas Patra have also increased. However, there has been no change in the interest rates of PPF and Savings Account Scheme.
The government has changed the interest rates on small savings schemes for the third time in the last 9 months. Now interest ranging from 4% to 8.2% will be given on small savings schemes. Earlier, on January 1, the government had increased the interest rates of small savings schemes for the January-March quarter. Now the interest rates will be changed on 1 July.
| Scheme | Old Interest Rates | New Interest Rates |
| Senior Citizen Saving Scheme | 8 | 8.2 |
| Sukanya Samriddhi Yojana | 7.6 | 8 |
| PPF | 7.1 | 7.1 |
| Kisan Vikas Patra | 7.2 | 7.5 |
| National Saving Certificate | 7 | 7.7 |
| Time Deposit 5 Years | 7 | 7.5 |
| Time Deposit 3 Years | 6.9 | 7 |
| Time Deposit 2 Years | 6.8 | 6.9 |
| Time Deposit 1 Year | 6.6 | 6.8 |
| Monthly Income Scheme | 7.1 | 7.4 |
| Recurring Deposit | 5.8 | 6.2 |
| Savings Account | 4 | 4 |
Loan rate increased, hence the return on savings increased
According to experts, the decision to increase the interest has been taken because the loan rate is continuously increasing. It has been a trend, when the rate of loan is expensive, then the public deposits also get more returns.
This can be gauged from the fact that banks are also continuously increasing the interest rates on fixed deposits. In 2020, where the interest rate on fixed deposits had reached 4%, now some banks are also offering 8% interest.
Interest rates are reviewed every quarter
The interest rates for Small Savings Scheme are reviewed every quarter. The formula for fixing their interest rates was given by Shyamala Gopinath Committee. The committee recommended that the interest rates of these schemes should be 0.25-1.00% higher than the yield of government bonds of similar maturity.
This scheme is a major source of household savings
Small savings schemes are the major source of household savings in India and include 12 instruments. In these schemes, the depositors get assured interest on their money. Collections from all small savings schemes are deposited in the National Small Savings Fund (NSSF). Small savings schemes have emerged as a source of financing government deficit.
Small Savings Scheme Classification
Small savings instruments can be classified into three parts:
Postal Deposit (Savings Account, Recurring Deposit, Time Deposit and Monthly Income Scheme)
Savings Certificate: National Small Savings Certificate (NSC) and Kisan Vikas Patra (KVP)
Social Security Schemes: Sukanya Samriddhi Yojana, Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS)
