Interest rates on small savings schemes unchanged for first quarter of FY23
PTI | DC Correspondent
The interest rate has not been revised since the first quarter of 2020-21
Finance Minister Nirmala Sitharaman. (PTI)
New Delhi: The government on Thursday kept interest rates unchanged for small savings schemes, including PPF and NSC, for the first quarter of 2022-23 amid rising inflation.
The interest rate has not been revised since the first quarter of 2020-21.
Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to carry an annual interest rate of 7.1 per cent and 6.8 per cent, respectively, in the first quarter of the next financial year.
"The rate of interest on various small savings schemes for the first quarter of the financial year 2022-23, starting from April 1, 2022, and ending on June 30, 2022, shall remain unchanged from the current rates applicable for the fourth quarter (January 1, 2022, to March 31, 2022) for FY 2021-22," the finance ministry said in a notification.
Interest rates for small savings schemes are notified on a quarterly basis.
The one-year term deposit scheme will continue to earn an interest rate of 5.5 per cent in the first quarter of the next fiscal while the girl child savings scheme Sukanya Samriddhi Yojana will fetch 7.6 per cent.
It is to be noted that the country's biggest lender State Bank of India (SBI) offers 5 per cent interest rate on one-year fixed deposit.
The interest rate on the five-year senior citizens' savings scheme will be retained at 7.4 per cent. The interest on the senior citizens' scheme is paid on a quarterly basis.
The interest rate on savings deposits will continue to be at 4 per cent per annum.
Term deposits of one to five years will fetch an interest rate in the range of 5.5-6.7 per cent, to be paid quarterly while the interest rate on five-year recurring deposits will earn a higher interest of 5.8 per cent.
Recently, the Provident Fund (PF) rate was reduced to a four-decade low of 8.1 per cent for 2021-22 from 8.5 per cent.
Defending the proposal to cut interest rate paid on employees' provident fund deposits, Finance Minister Nirmala Sitharaman, earlier this month, said the rate is dictated by today's realities where interest rate on other small saving instruments was even lower.
Sitharaman had also cited the comparative prevailing interest rates of other schemes saying Sukanya Samriddhi Yojana offers 7.6 per cent, Senior Citizen saving scheme (7.4 per cent) and PPF (7.1 per cent) while SBI's 5-10 year fixed deposits gives 5.50 per cent.