Winning Bizness Desk

Mumbai. The Central Government has increased the interest rates of several small savings schemes including Senior Citizen Savings Scheme and Time Deposit. This increase in interest rates has become applicable from January 1. Apart from Senior Citizen Savings Scheme and Time Deposit, the interest rates of National Savings Certificate, Monthly Income Scheme and Kisan Vikas Patra have also increased. Senior Citizens Savings Scheme was getting 7.6% interest in the December quarter and now it has been increased to 8%. At the same time, the National Savings Certificate was getting an interest rate of 6.8% till now, which has been increased to 7%. The government has not made any change in the interest rates of Sukanya Samriddhi Yojana and Public Provident Fund (PPF).

Time deposit rates increases

There has been no change in the interest rate on post office savings accounts and the account holders will get interest at the same rate of 4% per annum. However, interest rates for time deposit schemes ranging from 1 year to 3 years have been increased by 1.10%. Earlier, in October also, the government had increased the interest received on several small savings schemes of the post office. The government had increased the interest rate on 2-year time deposits from 5.5% to 5.7%. The interest rate on 3-year time deposits was increased from 5.5% to 5.8%.

Interest on KVP up from 6.9% to 7.0%

Apart from this, the interest rate on Senior Citizen Savings Scheme was increased from 7.4% to 7.6%. At the same time, instead of 6.6% on the Monthly Income Account Scheme, 6.7% interest was done annually. Apart from this, the interest rate on Kisan Vikas Patra was increased from 6.9% to 7.0%. There was no change in the interest rates of other schemes. The interest rates for Small Savings Scheme are reviewed every quarter. The formula for fixing the interest rates of these schemes was given by the 2016 Shyamala Gopinath Committee and the committee suggested that the interest rates of these schemes should be 0.25-1.00% higher than the yield of government bonds of similar maturity.