New Delhi: The interest rate hike announced on small deposits including post office term deposits, NSC, and senior citizen savings scheme will be effective from today.
The government on Friday raised the interest by up to 1.1 percentage points from January 1 in line with firming interest rates in the economy, reported news agency PTI.
It is to be noted that the interest rates on Public Provident Fund (PPF) and the girl child savings scheme Sukanya Samriddhi remains unchanged.
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The hike is the second quarterly increase in a row. In September last year, the Centre raised the interest rates of these small savings schemes by 10-30 basis points for the October-December quarter after the rates remained unchanged for more than two years.
What Investors Stand To Gain
With the revision, National Savings Certificate (NSC) will yield a 7 per cent interest rate from January 1 compared to 6.8 per cent at present. Similarly, the senior citizen savings scheme will offer 8 per cent interest against 7.6 per cent currently.
Interest rates on Post Office term deposit schemes of duration 1 to 5 years will rise by up to 1.1 percentage points. The monthly income scheme too will yield 7.1 per cent interest, up from 6.7 per cent.
The one-year deposit will give 6.6 per cent interest against 5.5 per cent currently, while two-year deposit will give 6.8 per cent interest against 5.7 per cent currently. The three-year time deposit will give 6.9 per cent interest against 5.8 per cent currently, while 5 year time deposit will give 7 per cent interest against 6.9 per cent.
With regard to Kisan Vikas Patra (KVP), the government has raised the interest rates to 7.2 per cent, thereby maturing in 120 months. Currently, KVP yields 7 per cent rate with a maturity period of 123 months.
The central bank has periodically stressed that the government sticks to the formula-based approach while setting small savings interest rates.