Finance Ministry Updates Interest Rates for Small Savings Schemes
On Friday, the finance ministry announced its decision to maintain the interest rates for 11 out of the 12 small savings schemes for the upcoming December quarter. However, there has been an upward adjustment in the interest rate for five-year recurring deposits. This rate has been increased by 20 basis points, moving from the rates of the last three months to 6.7%.
Insight into the Recent Rate Adjustments
The department of economic affairs (DEA) highlighted that the recent quarterly interest rate hike is not as pronounced as the increases observed in the two preceding quarters. This shift aligns with the anticipated yield trajectories of government securities (g-secs) for matching tenures and mirrors the easing observed in retail inflation for August.
Financial experts have pointed out the notable influx of funds into the National Small Saving Fund. The retention of rates for nearly all schemes underscores the government’s positive outlook, suggesting that they expect the deposit trends to remain robust.
As per the most recent official communication, deposit rates for both the public provident fund (PPF) and the Sukanya Samriddhi account will remain unchanged at 7.1% and 8% respectively. Furthermore, consistent rates have also been confirmed for several other savings vehicles, including the Senior Citizen Savings Scheme (8.2%), the National Savings Certificate (7.7%), the Kisan Vikas Patra (offering 7.5% for a maturity period of 115 months), and the standard savings deposit (4%).
