The central government on Friday raised the interest rates on various small savings schems for the three months from 1 April to 30 June by 10 to 70 basis points, showed an official order.
The highest increase is in the case of National Savings Certificate, on which interest rate has been raised from 7% which was applicable in the January to June period of this calendar year to 7.7% for the period from 1 April to 30 June.
The rate on 5 year time deposit has been raised from 7% to 7.5%, while the rate on five year recurring deposit has been raised from 5.8% to 6.2%. The interest rate on Senior Citizen Savings Scheme has been raised from 8% to 8.2%, while that on Monthly Income Account Scheme has been raised from 7.1% to 7.4%, showed the order. The rate on Kisan Vikas Patra has been raised from 7.2% to 7.5%. The scheme will now mature in 115 months, compared to 120 months earlier. There is no change in interest rate on Public provident fund deposits, which remains at 7.1%.
The interest rate applicable on Sukanya Samriddhi Account scheme meant for girl child will fetch 8% in the April to June period against 7.6% in the first three months of this year, showed the order.
Experts said the rate increase on small savings instrument was expected and that it will help in garnering steady deposits in the June quarter.
In the union budget for FY24, finance minister Nirmala Sitharaman announced measures to make small saving schemes more attractive.
The budget proposed to raise the maximum deposit limit for Senior Citizen Savings Scheme from ` ₹15 lakh to ₹30 lakh and in the case of Monthly Income Account Scheme from ₹4.5 lakh to Rs` 9 lakh for single account and from ₹9 lakh to ₹15 lakh for joint account. The budget also proposed a new small saving scheme Mahila Samman Savings Certificate, that will be made available for a two-year period up to March 2025.