On Thursday, the Central Government announced an interest rate hike on the small savings scheme for the third quarter (October-December). The new interest rate hikes will be applicable for Q3 of FY 2022-23 starting 1 October 2022 and ending on 31 December 2022.
It is the first time the government has raised interest rates on the small savings schemes since the January- March 2019 quarter. It had kept the rates unchanged since the April-June quarter of 2020 when they were slashed across schemes.
Senior Citizen Saving Scheme
The government has hiked the interest rate of the Senior Citizen Savings (CSS) scheme to 7.6% for the October-December period from 7.4%, earning 20 basis points more.
Kisan Vikas Patra Scheme
The government has hiked the interest rate of the Kisan Vikas Patra (KVP) scheme to 7% from 6.9%. Thus, the KVP deposits will mature in 123 months. There is a hike of ten basis points on the interest payouts of KVP.
Post Office Time Deposit
The interest rate of the Post Office Three-Year Time Deposit is increased to 5.8% from 5.5%, a rise of 30 basis points for the third quarter of the financial year. There is a hike in the interest rate of the Post Office Two-Year Time Deposit to 5.7% from 5.5%. The Post Office Monthly Income Account Scheme interest rate is increased to 6.7% from 6.6%.
Schemes Where Interest Rates Are Not Changed
There is no change in the interest rates of the following scheme:
These small savings schemes are popular with the salaried class for tax savings. The returns of these schemes are also higher than bank fixed deposits.
For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@clear.in
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