Centre hikes interest rate on small saving schemes by up to 30 bps

The Centre on Thursday (September 29) raised the interest rates on small saving schemes like the Senior Citizens Saving Scheme (SCSS) and three-year post office term deposit up to 30 basis points for the October-December quarter of the 2022-23 fiscal.

This is the first increase in interest rates on schemes in 10 quarters – the Centre had left the interest rates unchanged to cope with high inflation and stabilize the economy battered by the COVID-19 pandemic.

While announcing the hike in rates, the Union Finance Ministry said that the new rates will be effective from October 1 to December 31. Interest rates are revised on a quarterly basis.

The schemes also include the five-year term deposits and recurring deposits.

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The ministry said that the interest rate for the Kisan Vikas Patra has been raised to 7.7 per cent. The maturing period of the scheme has been reduced to 112 months against the previous period of 118 months.

Similarly, the increased rates for five-year term deposits, recurring deposits and SCSS now stand at 7.8 per cent, 7.3 per cent and 8.7 per cent respectively.

The interest rates on the three-year post office term deposit have been raised to 5.8 per cent while that on the two-year term deposits has been increased to 5.7 per cent. The rate on the post office monthly scheme has also been raised by 10 bps to pay account holders 6.7 per cent.

The ministry, however, has maintained the past rates for popular schemes like Public Provident Fund (7.1 per cent), National Savings Certificate (6.8 per cent), and Sukanya Samriddhi Scheme (7.6 per cent).