The government has recently announced an upward revision in interest rates for select savings schemes for the July-September quarter. This move aligns with the high-interest rates prevailing in the banking system and aims to provide investors with higher returns while encouraging savings. Let’s delve into the details of these changes:
Revised Rates for Recurring Deposits (RD)
During the second quarter of the current fiscal year, the interest rate for the five-year recurring deposit (RD) has been raised by 0.3 percent. RD holders will now receive an interest rate of 6.5 percent, up from the previous 6.2 percent.
Term Deposit Rates
Post office one-year term deposits will now earn an interest rate of 6.9 percent, marking a 0.1 percentage point increase. Similarly, two-year term deposits will earn 7 percent, compared to the previous rate of 6.9 percent. The interest rates for three-year and five-year term deposits remain unchanged at 7 percent and 7.5 percent, respectively.
Other Savings Schemes
The interest rates for popular savings schemes such as the Public Provident Fund (PPF) and savings deposits will remain steady at 7.1 percent and 4 percent, respectively. The National Savings Certificate (NSC) will maintain its interest rate of 7.7 percent for the July-September 2023 period. The Sukanya Samriddhi scheme, designed for girl children, will continue to offer 8 percent interest. The senior citizen savings scheme will retain an interest rate of 8.2 percent, while the Kisan Vikas Patra (KVP) will provide 7.5 percent interest.
Consistency in Interest Rate Changes
Interest rates for small savings schemes are reviewed and notified on a quarterly basis. Over the past two quarters, there have been increases in interest rates to reflect the upward trend in the benchmark lending rate set by the Reserve Bank of India (RBI).
No Change in the Monthly Income Scheme
The Monthly Income Scheme will maintain its interest rate of 7.4 percent for investors, with no increase announced in this quarter. These revised interest rates on various savings schemes aim to offer better returns to investors and promote a culture of savings among the populace. It is advisable for individuals to stay informed about the prevailing interest rates and choose suitable investment options based on their financial goals and risk appetite.
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