The government has increased the interest rates on eight small savings schemes in the range of 20-110 basis points for the January to March quarter.

The interest rates, effective from 1 January, now range from 4% to 7.6%. With the Reserve Bank of India (RBI) hiking the policy rate to contain inflation, interest rates across the spectrum are rising.

The government, however, has kept the rate for Public Provident Fund (PPF) and Sukanya Samriddhi scheme unchanged for the quarter beginning January. 

The rate for national savings certificates has been hiked to 7% for the fourth quarter, up from 6.8% earlier.

The interest rate for the post office 1 year time deposits has been increased to 6.6% from 5.5%. Term deposits with a tenure of two years will now fetch an interest rate of 6.8% from 5.7% while a 2-year tenure will earn 6.9% from 5.8% earlier. The 5-year deposits will get an interest rate of 7%, up from 6.7%.

The rates for 5-year recurring deposits and savings deposits have also remained unchanged at 5.8% and 4%, respectively.

The interest rate on the Senior Citizens Savings Scheme will increase to 8% from 7.6%.

The monthly income scheme interest rate will go up to 7.1% from 6.7%.

Kisan Vikas Patra with a maturity of 120 months will earn a higher interest rate of 7.2% against 7% with a maturity of 123 months earlier.

The PPF will continue to earn 7.10% interest rate. Sukanya Samriddhi account scheme’s 7.6% interest rate has also been unchanged.

Interest rate on various small savings schemes were revised upwards in the range of 10-30 basis points for the third quarter of 2022-23, after remaining unchanged for nine consecutive quarters.

The small savings interest rates are fixed by the government on a quarterly basis with a spread of 0-100 basis points over and above G-sec yields of comparable maturities.