PPF, Senior Citizen Scheme, Small Savings Scheme Advertised interest rates; Find out here
The Ministry of Finance has kept interest rates for small savings schemes unchanged for the June quarter of fiscal year 2023. Small savings instruments include the Public Provident Fund (PPF) account, Sukanya accounts Samriddhi, Savings Scheme for the Aged, Postal Savings Account, 5- Post Recurring Deposit (RD) Account, National Savings Certificates (NSC) among others. “The interest rate of the various small savings plans for the first quarter of the financial year 2022-23, beginning on April 1, 2022 and ending on June 30, 2022, remains unchanged compared to the rates in force applicable for the fourth quarter (January 1, 2022 to March 31, 2022) of fiscal year 2021-22,” the finance ministry said in a statement.
PPF, Savings Scheme for Senior Citizens, NSC Interest Rates
According to the latest notification from the Ministry of Finance, the PPF will continue to earn 7.1% interest. The Senior Citizens Savings Scheme (SCSS) will continue to charge 7.40% while time deposits at post offices will get 5.5-6.7%. Interest for the NSC or National Savings Certificate was set at 6.8 percent. The Post Office Monthly Income Scheme or MIS will now pay 6.6% interest. The Post Office 5-year term deposit will continue to earn 6.7% interest, while the recurring 5-year deposit will earn 5.8% interest. The interest rates will apply from April 1, 2022 to June 30, 2022.
Good news for bond investors
With interest rates on traditional savings options such as time deposits falling in recent years, investors are drawn to smaller savings plans because they offer higher returns. The government has kept the small savings scheme interest rates on hold at a time when fixed bank deposit rates are at historic lows. The Union Government also recently cut the Employees Provident Fund (EPF) interest rate for the 2021-22 financial year to its lowest level in 40 years, at 8.1%. The move will bring much-needed relief to middle-class investors who rely on fixed-income instruments.
Will the government soon reduce interest for small savings plans?
The Reserve Bank of India (RBI), however, has suggested a further reduction in interest rates on small savings instruments for the first quarter of the financial year 2022-23. “The Government of India revised the interest rates on Small Savings Instruments (SSI) on December 31, 2021, and left them unchanged for the seventh consecutive quarter. Current interest rates on SSI are higher by 42 to 168 basis points at formula-based rates for the fourth quarter of 2021-22,” he added.
The Union government reviews the interest rates for small savings schemes quarterly. These administered interest rates are linked to market yields on G-secs with a lag and are set on a quarterly basis at a spread ranging from 0 to 100 basis points above G-sec yields of comparable maturities, the central bank said in its ‘State of the Economy Report.
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