The government has increased the interest rates on several modest savings schemes by 10 basis points to 30 basis points, which is excellent news for savers. For the third fiscal quarter of FY23, the new rates are changed (October to December 2022).
Small savings plans are risk-free and packed with guaranteed returns on hard-earned money, just like conventional fixed deposits (FDs). The former is more affordable and diverse than FDs, which is one of their main distinctions. Numerous Post Office small savings plans are available for everyone from young children to senior individuals. But are the new rates superior to the FD rates offered by public sector banks?
The interest rates on various small savings plans have been adjusted for the third quarter of the fiscal year 2022–23, which runs from October 1 through December 31, 2022, according to a statement from the Finance Ministry on Thursday.
What are the new rates on small savings schemes with effect from October 1?
2-year Time Deposit: From 5.5% to 5.7%, an increase of 20 basis points has been made to the interest rate on 2-year Time Deposits. The interest rate on 3-year time deposits has increased dramatically by 30 basis points, from 5.5% to 5.8%.
Senior Citizen Savings Programs: Starting on October 1, 2022, seniors will be able to earn a staggering 7.6% interest rate on their savings, up from the existing 7.4%. This will result in an increase of 20 basis points from the second quarter of this fiscal year to the third quarter.
The interest rate for the Monthly Income Account Scheme has been raised from 6.6% to 6.7% for Q3 of FY23, an increase of 10 basis points.
Kisan Vikas Patra Latest Interest rate
Here, the rate is similarly increased by 10 basis points, but the maturity period has been shortened by one month. In contrast to the present 6.9% rate, which matures in 124 months, the scheme will now give a 7% rate from October 1 through December 31 of the current year.
The small savings scheme interest rates that remain constant are:
Savings accounts still provide a 4% interest rate, while time deposits with terms of one year or longer provide 5.5% and five years or more provide 6.7%. 5-year recurring deposits continue to offer a yield of 5.8% in the meanwhile. The interest rates for the Public Provident Fund plan and National Savings Certificate remain unchanged at 6.8% and 7.1%, respectively. Last but not least, the Sukanya Samridhi Account plan will maintain the same interest rate of 7.6%.
Every three months during a fiscal year, the Indian government chooses the interest rates for modest savings schemes. The interest rates for these post office schemes were left unchanged by the Center for the quarter ending in June 2022.
