Small Saving Scheme: For the last two years, the government has kept the interest rates of small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), Sukanya Samriddhi Yojana, Kisan Vikas Patra the same. Whereas, during this period, banks have increased the interest rates of home loans and fixed deposits (FD) significantly.
Small Saving Scheme : For the last two years, the government has kept the interest rates of small saving schemes like Public Provident Fund (PPF), National Saving Certificate (NSC), Sukanya Samriddhi Yojana, Kisan Vikas Patra the same. Whereas, during this period, banks have increased the interest rates of home loans and fixed deposits (FD) considerably.
Still why did the government not increase the rates?
The reason for this is related to the decision taken at the beginning of the Corona period. When the lockdown was imposed in March 2020, the Reserve Bank of India (RBI) had cut the repo rate by 75 basis points to reduce the financial burden on the people. That is, the repo rate was reduced to 4.40%. After this, banks also reduced interest rates on FD and savings.
But at that time the government did not reduce the interest rate of small savings schemes. Especially to ensure that the elderly get regular income, returns were maintained in these schemes. Now when RBI has again increased the repo rate and banks are also paying more interest, even then the government has kept the rates of small savings schemes unchanged.
Experts believe that the government is keeping its interest expenditure under control. Because if the government also increases the interest rates of small savings schemes, then it will have to pay more interest on them. This will increase the burden on the government treasury. Therefore, at present, the government is trying to maintain balance by not increasing the rates. When banks were paying less interest on FDs, then more was being given on small savings schemes. Now that the bank rates have increased, these schemes have been kept stable.
Finance Ministry officials say that further changes will depend on the inflation and liquidity in the market. If inflation increases rapidly or there is less money in the system, then the government may consider increasing interest rates.
At present, this much interest is being received on these schemes
The government had kept the interest rates stable for the quarter of July-September 2022. Currently the interest rates on some major schemes are as follows.
- Public Provident Fund (PPF) – 7.1%
- National Savings Certificate (NSC) – 6.8%
- Sukanya Samriddhi Yojana – 7.6%
- Senior Citizen Savings Scheme (5 years) – 7.4%
- Post Office Monthly Income Scheme – 6.6%
- Kisan Vikas Patra – 6.9%
Even though the interest rates are somewhat low, these schemes are still considered the first choice of the middle class and pensioners due to government guarantee and stable returns.
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