There was no change in the interest rates of small savings schemes even after the continuous increase in repo rate and inflation. This is the 9th consecutive quarter when interest rates have not changed.
Small Savings Scheme: The government has again given a jolt to those investing in Small Savings Schemes. Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and Sukanya Samriddhi Yojana (SSY), Time Deposit Scheme (PSY) even after continuous hike in repo rate and inflation. There is no change in the interest rates of small savings schemes like TD) and Monthly Income Scheme (MIS). This is the 9th consecutive quarter when interest rates have not changed.
Have invested money in small savings schemes like FD, RD, PPF, NSC? Calculate, in how many days the amount will double
Banks had given relief, here’s the setback
That is, interest on small savings will continue to be available as before, at least till September 2022. While it was believed that in the era of rising inflation, the government can give relief to small investors by increasing the interest rates. Let us inform that in the past, RBI has increased the repo rate by 90 basis points for two consecutive times, after which many banks had increased the interest rates on FDs.
How much interest is getting on which scheme?
Public Provident Fund (PPF): 7.1% p.a.
Senior Citizen Saving Scheme (SCSS): 7.40% p.a.
National Saving Certificate (NSC): 6.8% p.a.
Kisan Vikas Patra (KVP): 6.9% per annum
Sukanya Samriddhi Yojana (SSY): 7.60% p.a.
Time Deposit Scheme (TD): 6.7% p.a.
Monthly Income Scheme (MIS): 6.6% p.a.
Recurring Deposit (RD): 5.8% p.a.
Earlier the deduction was done on 1st April 2020
The government had cut the interest on small savings schemes last year on 1 April 2020. Then their interest rates were cut by up to 1.40 percent. After this, the decision to cut was also taken on 31 March 2021, which was withdrawn. There has been no change in the rates of small savings since then.
Because of this, interest rates were expected to rise.
The interest rates of the 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. The committee had suggested that the interest rates of these schemes should be 0.25-1.00 per cent higher than the yield of government bonds of similar maturity. Currently, the interest rates on government bond yields are close to 7.5 per cent. It was believed that according to the formula given by the Gopinath Committee in 2011, the rate of interest on small savings schemes could increase by 25 to 100 basis points. This is because the yield on the benchmark 10-year bond has risen 140 basis points in the past one year. During this period it has increased from 6.04 percent to 7.46 percent. Its average in the April-June quarter has been 7.31 percent. Despite this, the interest rates of the Small Savings Scheme have not been increased.
www.financialexpress.com