Interest rates on small savings schemes like PPF, SCSS, and NSC are reviewed at the end of every quarter and are decided for the next quarter accordingly.
The finance ministry will today announce the revised interest rates on small savings schemes, including PPF, NSC and KVP, for October-December 2024 quarter.
The finance ministry will on September 30 review the interest rates on small savings schemes, including public provident fund (PPF), National Savings Certificates (NSC) and Kisan Vikas Patra (KVP). It will announce the latest interest rates for the October-December 2024 quarter. An expert expects the interest rates to remain unchanged.
“We expect a status quo on the small savings interest rates. Although the global rate cut cycle has begun, the domestic factors remain strong with inflation expected to go up from September onwards, thus a status quo looks likely,” Paras Jasrai, senior economic analyst at India Ratings & Research, said.
Currently, interest rates on small savings schemes range between four per cent (post office savings deposits) and 8.2 per cent (Senior Citizens Savings Scheme).
Recently, the European Central Bank and the People’s Bank of China started the rate cut cycle by reducing 25 basis points and 10 basis points, respectively. However, the Bank of Japan and Bank of England have kept their interest rates unchanged amid inflation risks. The Bank of Japan is expected to raise interest rates in its upcoming review.
The Reserve Bank of India’s (RBI) monetary policy committee is also going to meet between October 7 and October 9 to decide on the interest rate decision. As of now, the key policy rates are expected to remain unchanged in India amid persistent food inflation.
What Are Small Savings Schemes?
Small Savings Schemes are savings instruments managed by the government to encourage citizens to save regularly. The small savings schemes have three categories — savings deposits, social security schemes and monthly income plan.
Saving deposits include 1-3-year time deposits and 5-year recurring deposits. These also include saving certificates such as National Saving Certificates (NSC) and Kisan Vikas Patra (KVP). Social security schemes include Public Provident Fund (PPF), Sukanya Samriddhi Account and Senior Citizens Savings Scheme. The monthly income plan includes the Monthly Income Account.
Interest rates on small savings schemes like PPF, post office savings and term deposits, NSC and SSY, are reviewed at the end of every quarter and are decided for the next quarter accordingly. The rate review is done on the basis of G-Sec yields of the preceding quarter (April-June 2023 in this case).
What Are The Current Interest Rates On Small Savings Schemes?
The interest rates for the current quarter July-September 2024 are as follows:
Savings Deposit: 4 per cent
1-Year Post Office Time Deposits: 6.9 per cent
2-Year Post Office Time Deposits: 7.0 per cent
3-Year Post Office Time Deposits: 7.1 per cent
5-Year Post Office Time Deposits: 7.5 per cent
5-Year Recurring Deposits: 6.7 per cent
National Saving Certificates (NSC): 7.7 per cent
Kisan Vikas Patra: 7.5 per cent (will mature in 115 months)
Public Provident Fund: 7.1 per cent
Sukanya Samriddhi Account: 8.2 per cent
Senior Citizens Savings Scheme: 8.2 per cent
Monthly Income Account: 7.4 per cent.
