Centre hikes interest rates on small savings schemes
The interest rates of schemes like the Senior Citizen Savings Scheme (SCSS), Monthly Income Savings Scheme, National Savings Certificate (NSC), Kisan Vikas Patra, all post office time deposits and Sukanya Samriddhi Account Scheme have been hiked.
The interest rate on the Public Provident Fund (PPF) has been kept unchanged at 7.1%.
The NSC interest has seen the largest hike of 70 basis points and now stands at 7.7%; SCSS interest has been hiked by 20 basis points, from 8% to 8.2%.
The SCSS deposit limit is also expected to increase to Rs 30 lakh per account as announced in Union Budget 2023.
The Reserve Bank of India (RBI) has been increasing key rates since May 2022.
This is the third time in the last 9 months, the Centre has increased the interest rates on small savings schemes. Due to this, banks have been increasing interest rates on fixed deposits (FD) which is good news for FD investors who have been sitting with decadal low interest rates.
The latest interest rate hike was expected as the government bond yields have risen. Small savings rates are linked to government bond yields of the same maturity and are reset every quarter. Now that bond yields have risen sharply, small savings rates have been revised upwards.
(With inputs from agencies)
The post is published through a syndicated feed and attributed to Times Of India