PPF, SSY, SCSS interest increase: Interest Rate on Small Saving Scheme: The interest rates of all types of government small savings schemes are going to be reviewed by the end of this month i.e. by 30 September 2023.
The central government has increased the interest on several small savings schemes like Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC) and Sukanya Samriddhi Yojana (SSY) in the last quarters. However, the interest rate of Public Provident Fund (PPF) has not been changed since April 2020. Now the big question is whether the interest rates of PPF, Sukanya Samriddhi Account, Senior Citizen Savings Schemes (SCSS) will increase in the December quarter?
Decision will be taken by 30th September
The central government decides the interest rates of these schemes on the basis of the yield of Government Securities of the last three months. He reviews them quarterly. Post Office Saving Scheme, PPF, NSC, KVP etc. come under the count of small saving schemes. The government will decide the interest rate on small savings schemes for the October-December 2023 quarter.
How are interest rates decided?
These interest rates depend on the yields of government securities (G-Sec yields). Interest rates in small savings schemes depend on the yield on government securities of the previous quarter. 10 year government securities are giving yields ranging from 7 percent to 7.2 percent. It is expected to be between 7.1 percent to 7.2 percent. If experts are to be believed, there is little hope of change in interest rates on small savings schemes for the October-December 2023 quarter.
These are the interest rates right now
Interest rates on small savings schemes range from 4 percent to 8.2 percent per annum. The government is paying interest at the rate of 7.1 percent per annum on PPF. At present the interest on small savings scheme is almost equal to that of FD. The government last increased interest on small savings schemes on June 30, 2023. Then the government had increased the interest on one year and 2 year post office FD and 5 year RD (Recurring Deposit). The government had changed the interest for the fourth time after September 2022.
Currently, these are the interest rates on small savings schemes
- 1 year Post Office FD: 6.9 percent
- 2 year post office FD: 7 percent
- 3 year post office FD: 7 percent
- 5 year post office FD: 7.5 percent
- 5 year RD (Post Office RD): 6.5 percent
- National Savings Certificate (NSC): 7.7 percent
- Kisan Vikas Patra (KVP): 7.5 percent (mature in 115 months)
- PPF – 7.1 percent
- Sukanya Samridhi Account (Sukanya Samridhi Yojana): 8.0 percent
- Senior Citizen Saving Scheme: 8.2 percent
- Monthly Income Scheme (Post Office Monthly Scheme): 7.4 percent
