Government hikes interest rates of small savings schemes by up to 70 basis points for the April-June quarter
Small Savings Schemes: The government had hiked the interest rates of small savings schemes like Senior Citizen Savings Scheme, Sukanya Samriddhi & NSC by up to 70 bps for the April-June 2023 quarter. The finance ministry statement said the highest interest rate hike was made in the NSC from 7 per cent to 7.7 per cent now, while Public Provident Fund (PPF) and savings deposits saw no change. The interest rates on 5-year post office deposits were hiked by 50 basis points to 7.5 per cent for April-June 2023. The interest rates for popular PPF and savings deposits were kept stable at 7.1 per cent and 4 per cent, respectively, there has been an increase between 0.1 per cent and 0.7 per cent in other saving schemes. For the third time, GOI has increased the interest rates on small savings schemes in the last 9 months,
Small Savings Schemes
Small Savings Schemes
Changes in interest rates on small savings schemes can have serious impacts on individuals, including common citizens and investors. For those who save overspending, higher interest rates mean increased returns on their investments, providing a valuable opportunity to grow their savings over time. Retirees and senior citizens, who often rely on interest income from their investments, stand to benefit from higher rates as it can enhance their financial security in retirement. However, for borrowers, higher interest rates could translate to increased borrowing costs if they have loans linked to such rates, potentially adding to their financial burden. Investors, particularly those who prioritize safety and stability, may adjust their investment decisions based on changes in interest rates on small savings schemes. Higher rates may attract more investment, while lower rates could prompt investors to explore alternative income sources or adjust their portfolio allocations.
| Small Savings Scheme | Previous Interest Rate | Revised Interest Rate | Change (Basis Points) |
|---|---|---|---|
| Senior Citizen Savings Scheme | Not specified | Not specified | Not specified |
| Sukanya Samriddhi Yojana | Not specified | Not specified | Not specified |
| National Savings Certificate (NSC) | 7.0% | 7.7% | +70 bps |
| Public Provident Fund (PPF) | 7.1% | 7.1% | No change |
| Savings Deposits | 4.0% | 4.0% | No change |
| 5-year Post Office Deposits | Not specified | 7.5% | +50 bps |
How much has the government increased interest rates on small saving schemes?
The government increased interest rates on small saving schemes increased the interest rates on small saving schemes by up to 70 basis points.
