The Centre on 31 March 2022 decided not to change the interest rate of small saving schemes for Q1FY23. Small saving schemes here include Public Provident Fund (PPF), National Savings Certificate (NSC) and post office small saving scheme.
The Finance Ministry yesterday announced the Government’s decision through a notification saying, "The rate of interest on various small savings schemes for the 1st quarter of the financial year 2022-23, starting from 1 April 2022, and ending on 30 June 2022, will remain unchanged from the current rates applicable for the 4th quarter (January 1, 2022, to March 31, 2022) for FY 2021-22."
PPF, NSC Interest Rate
Thus, PPF interest rate will continue at 7.10% in April to June 2022 quarter whereas the interest rate of NSC would continue at 6.80% per annum. Those taking benefit of Sukanya Samriddhi Yojana or SSY will continue to get 7.60% interest rate on their deposits in 1st quarter of the new financial year.
Post Office Scheme Interest Rate
Likewise, post office small saving investors would continue to get the return on their money that they have got in the last quarter.
Moreover, one-year post office term deposit will continue to bring 5.50% return on an investor's deposits in April to June 2022 quarter. Post office term deposits for 1-5 years will give 5.50% to 6.70% per annum. The interest rate on five year Post Office RD will remain at 5.80% per annum.
The rate of interest on five-year senior citizen saving scheme will also continue to fetch 7.40% for the first quarter of the new fiscal. And, savings interest rate will continue at 4% per annum.
How the interest rates are fixed for small savings schemes?
The interest rates on small savings schemes are reviewed by the government after every quarter. The method to arrive at the interest rates for small savings scheme was brought by Shyamala Gopinath Committee. The committee had recommended that the interest rates on different schemes must be 25-100 bps higher than the yields of government bonds of similar maturity.
