Srinagar, Dec 29: The Ministry of Finance has slightly revised the interest rates on various small savings schemes for the January-March quarter of 2024. The new rates, which will be effective from January 1, 2024, are marginally higher than the rates offered in the October-December quarter.
According to a Finance Ministry notification received by Ziraat Times, the biggest increase is for the Kisan Vikas Patra (KVP) scheme, where the interest rate has been hiked from 7.1% to 7.5% for maturity in 115 months. The interest rate for the Sukanya Samriddhi Account Scheme has also been increased by 0.2 percentage points to 8.2%.
The interest rates for other schemes have remained largely unchanged. The interest rate for the Public Provident Fund (PPF) scheme remains at 7.1%, while the interest rate for the Senior Citizen Savings Scheme (SCSS) remains at 8.2%.
The Ministry of Finance said that the revision in interest rates is based on the prevailing market conditions and government’s borrowing rates.
Here is a table showing the revised interest rates for various small savings schemes:
| Scheme | Interest Rate (October-December 2023) | Interest Rate (January-March 2024) |
|---|---|---|
| Savings Deposit | 4.0% | 4.0% |
| 1 Year Time Deposit | 6.9% | 6.9% |
| 2 Year Time Deposit | 7.0% | 7.0% |
| 3 Year Time Deposit | 7.0% | 7.1% |
| 5 Year Time Deposit | 7.5% | 7.5% |
| 5 Year Recurring Deposit | 6.7% | 6.7% |
| Senior Citizen Savings Scheme | 8.2% | 8.2% |
| Monthly Income Account Scheme | 7.4% | 7.4% |
| National Savings Certificate | 7.7% | 7.7% |
| Public Provident Fund Scheme | 7.1% | 7.1% |
| Kisan Vikas Patra | 7.1% (for maturity in 115 months) | 7.5% (for maturity in 115 months) |
| Sukanya Samriddhi Account Scheme | 8.0% | 8.2% |
The Ministry of Finance also said that it will continue to review the interest rates on small savings schemes on a quarterly basis.
Implications of the interest rate hike
The slight increase in interest rates on small savings schemes is a welcome move for savers. However, the interest rates are still lower than the prevailing inflation rate, which means that savers are still losing purchasing power.
The increase in interest rates on the KVP and Sukanya Samriddhi Account Scheme is likely to make these schemes more attractive to investors.
