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Government maintains status quo on small savings schemes’ interest rates for the first quarter of fiscal year 2025; Review rates for NSC, Sukanya Samriddhi, and other schemes

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Govt keeps interest rates on small savings schemes unchanged for Q1 FY25; Check rates for NSC, Sukanya Samriddhi, others

The government has decided to maintain the interest rates on various small savings schemes unchanged for the first quarter of the next fiscal, starting from April 1, 2024. This decision means that the interest rates on these schemes will remain the same until June 30, 2024. The notification regarding this update was issued by the finance ministry today.

The small savings schemes offer guaranteed returns to conservative investors at regular intervals, with compounding options ranging from monthly to annually. The interest rates on these schemes typically range between 6-8 per cent. Some of the key schemes include Sukanya Samriddhi Account Scheme, PPF, Kisan Vikas Patra, Senior Citizen Savings Scheme, National Savings Certificate (NSC), Mahila Samman Savings Certificate, and Post Office Time Deposit Account.

For example, the Sukanya Samriddhi Account Scheme offers an interest rate of 8.2 percent per annum, while the PPF offers a rate of 7.1 percent per annum. The government’s decision to keep the interest rates unchanged on these schemes aligns with the current economic environment and market conditions.

The Reserve Bank of India (RBI) has increased the benchmark lending rate by 2.5 percent since May 2022, pushing banks to raise interest rates on deposits as well. However, the RBI has maintained the status quo on policy rates in its recent monetary policy meetings. The government’s decision to maintain the interest rates on small savings schemes provides stability and predictability for investors in these instruments.

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