Government Increases Interest Rates on Savings Schemes: Boosting Returns for Investors

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.

Interest Rates on Savings Schemes – FAQs

Q1: What are the revised interest rates for term deposits?

Ans: Postal institutions will pay 6.9% interest on one-year term deposits and 7% interest on two-year term deposits. The interest rates on term deposits for three and five years are at 7 percent and 7.5 percent, respectively.

Q2: Have the interest rates for popular savings schemes like the Public Provident Fund (PPF) and savings deposits changed?

Ans: No, they stay fixed at 7.1 percent and 4 percent, respectively, for the PPF and savings deposits.

Q3: Has there been any change in the interest rate for the Monthly Income Scheme?

Ans: No, there has not been a rise in interest rates for the Monthly Income Scheme, which keeps paying investors 7.4%.


  • Pritipalit

    Priti Palit, an accomplished edtech writer, boasts a wealth of experience in preparing candidates for multiple government exams. With a passion for education and a keen eye for detail, she has contributed significantly to the field of online learning. Priti's expertise and dedication continue to empower aspiring individuals in their pursuit of success in government examinations.

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