Saturday, July 13, 2024

Government raises interest rates on select small saving schemes by up to 0.3%

Photo used for representation purpose only.

Photo used for representation purpose only.

The government on June 30 raised interest rates on select saving schemes by up to 0.3% for the July-September quarter in line with the high-interest rates in the banking system.

The highest increase of 0.3% was for the five-year recurring deposit (RD). During the second quarter of the current fiscal, RD holders would get 6.5% against the existing 6.2%, as per the finance ministry notification.

With the revision, a one-year term deposit with post offices will now earn 0.1 percentage higher point at 6.9% and for the two years tenor — 7% (up from 6.9%).

However, interest rates on term deposits for three years and five years have been retained at 7% and 7.%. The interest rates for popular PPF and savings deposits are retained at 7.1% and 4%, respectively.

The interest rate on the National Savings Certificate (NSC) remained unchanged at 7.7% for July 1 to September 30, 2023, period.

The new rate for the girl child savings scheme Sukanya Samriddhi too stood at the existing level of 8%.

The interest rate on the senior citizen savings scheme and Kisan Vikas Patra (KVP) is 8.2% and 7.5%, respectively.

Interest rates were increased in the last (January-March) quarter as well as the April-June quarter.

Interest rates for small savings schemes are notified on a quarterly basis.

There is no increase in interest rate for Monthly Income Scheme, and this will earn 7.4 per cent for the investors.

The Reserve Bank since May has raised the benchmark lending rate by 2.5 per cent to 6.5 per cent, prompting banks to raise interest rates on deposits as well.

The RBI has maintained the status quo on policy rate in the last two consecutive Monetary Policy Committee meetings.

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