Post Office Savings Scheme: Lakhs of Indian citizens, especially those who have a low risk appetite, depend on various post office savings schemes designed for specific groups or individuals. Post office savings schemes are highly reliable, as they are backed by the government, and provide a higher rate of interest than most banks — including private and public sectors — in the country. However, since a long time, these small savings schemes have not seen a hike in the interest rates when the government reviewed the same.
Keeping that in mind, investors of the National Savings Certificate, Sukanya Samriddhi Yojana, Senior Citizens Savings Scheme or Public Provident Fund (PPF) are likely to get a good news later next month. The government may consider to change PPF, NSC or SSY scheme interest rates in June, thereby benefitting investors of these schemes, according to media reports.
No Rate Hike on Small Savings Schemes Recently
As mentioned earlier, the government has not hiked the interest rates of small savings schemes and post office schemes in a long time, especially after the Covid-19 pandemic that affected the country’s economy badly. In its quarterly review this year for the April to June Quarter, the Centre decided to keep the interest rates same on small savings schemes like the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana as the quarter ended March 31 2022. As per the rules, a government panel is set to meet soon and notify the new rates for the quarter starting July 2022, by June 30, which is the end of next month and the first quarter of the year.
Current Interest Rates on Post Office Schemes
Here are the current interest rates on post office savings schemes, which have come into effect from April 1 this year.
i. Public Provident Fund: 7.1 per cent
ii. National Savings Certificate: 6.8 per cent
iii. Sukanya Samriddhi Yojana: 7.6 per cent
iv. Kisan Vikas Patra: 6.9 per cent
v. Savings Deposit: 4 per cent
vi. 1-Year Time Deposit: 5.5 per cent
vii. 2-Year Time Deposit: 5.5 per cent
vii. 3-Year Time Deposit: 5.5 per cent
viii. 5 Year Time Deposit: 6.7 per cent
ix. 5 Year Recurring Deposit: 5.8 per cent
x. 5-year Senior Citizen Savings Scheme: 7.4 per cent
xi. 5-year Monthly Income Account: 6.6 per cent
Why Will PPF, Sukanya Samriddhi Yojana Rates Increase Now?
One may ask if the government did not hike the interest rates for PPF, Sukanya Samriddhi Yojana schemes in all this time, why is it likely to do the same now. This is because the Reserve Bank of India has hiked its repo rates by 40 basis points in an off cycle meet to tame inflation. While it means that borrowers will have to pay more interest on loans, it also has a flipside that investors will get better returns. Several nationalised and private banks are hiking their FD and RD rates now, and so the government may take a call next month to hike PPF interest rates, and SSY interest rates.