The government has hiked the interest rate on small savings schemes including public provident fund or PPF, which will now fetch 8% interest rate for the October to December quarter, up from 7.6% currently. Among other small savings schemes, Sukanya Samriddhi Account scheme will now fetch 8.5% interest rate as compared to 8.1% earlier.
The decision to increase small savings rate was announced by the finance ministry today. The interest rate on small savings schemes, which are benchmarked to yields on government bonds, are revised on a quarterly basis. With the 10-year benchmark yield now above 8%, many analysts had expected the government to hike interest rate on small savings schemes.
The interest rate on Kisan Vikas Patra has been hiked to 7.7% from 7.3%. This means that KVP will now mature or double in 118 months as compared to 112 months earlier.
The 5-year National Savings Certificate or NSC will now fetch 8%, the same rate as that of PPF, from 7.6% currently.
The interest rate on popular 5-year Senior Citizen Savings Scheme has been hiked to 8.7% from 8.3%.
Similarly, the interest rate on post office Monthly Income Scheme or MIS has been hiked to 7.7% from 7.3%.
The five-year post office recurring deposit scheme will fetch 7.3%, from 6.9% earlier.
The post office savings deposit interest rate has been kept unchanged at 4%.
The RBI had raised interest rate in August for the second straight meeting, but retained its “neutral” stance as it aimed to contain inflation while not choking growth.
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