In line with the current high-interest rates in the banking system, the government has announced an increase in interest rates on select savings schemes for the July-September quarter. The revised rates are designed to offer higher returns to investors and promote a culture of saving.
Revised Rates for Recurring Deposits (RD): The five-year recurring deposit (RD) has witnessed the most significant increase of 0.3 percent, with RD holders now earning 6.5 percent interest during the second quarter of the current fiscal, compared to the previous 6.2 percent.
Term Deposit Rates: One-year term deposits with post offices will now earn 6.9 percent, marking a 0.1 percentage point increase. Similarly, two-year term deposits will earn 7 percent, up from the previous 6.9 percent. The interest rates for three-year and five-year term deposits remain unchanged at 7 percent and 7.5 percent, respectively.
Steady Rates for Popular Schemes: The interest rates for popular savings schemes such as the Public Provident Fund (PPF) and savings deposits will remain unchanged at 7.1 percent and 4 percent, respectively. The National Savings Certificate (NSC) will also maintain its interest rate of 7.7 percent for the July-September 2023 period. The girl child savings scheme, Sukanya Samriddhi, will continue to offer 8 percent interest. Furthermore, the senior citizen savings scheme will maintain an interest rate of 8.2 percent, while the Kisan Vikas Patra (KVP) will offer 7.5 percent.
Quarterly Adjustments and Market Trends: Interest rates on small savings schemes are reviewed and notified on a quarterly basis. The recent upward revisions reflect the trend of increasing benchmark lending rates set by the Reserve Bank of India (RBI). However, there has been no change in the interest rate for the Monthly Income Scheme, which will continue to provide a return of 7.4 percent for investors.