Interest rates on small savings schemes unchanged

New Delhi, April 1:  In a major relief to common man, the Centre on Thursday maintained the interest rates on small savings schemes for the first quarter of FY23.

A Ministry of Finance’s office memorandum saod: “The rate of interest on various ‘Small Savings Schemes’ for the first quarter of 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) of FY2021-22.”

The status quo would allow savers to continue getting 4 per cent interest on small savings deposit during the April-June FY23 quarter. Besides, the 1-year time deposit rates will also remain at 5.5 per cent and so will the 5-year recurring deposit at 5.8 per cent.

The Public Provident Fund (PPF) will continue to fetch a 7.1 per cent rate while Sukanya Samriddhi Yojana (SSY) and National Savings Certificate will get an interest rate of 7.6 and 6.8 per cent, respectively.

Furthermore, the interest rate on Kisan Vikas Patra will stay at 6.9 per cent and the instrument will mature in 124 months.

“With the rise in Gsec yields over the last three months, as well as the inching up of deposit rates of banks, we had foreseen a small probability of the small savings rates being revised upwards for the coming quarter,” said Aditi Nayar, Chief Economist, ICRA.

“We expect a shallow rate hike cycle to commence in mid 2022, with 50 bps of repo hikes over August-October 2022, which may subsequently be mirrored in small savings rates being hiked.”