The wait for change in the interest rates of small savings schemes including Public Provident Fund finally ended on Friday. The Finance Ministry has announced an increase in the interest rate of some small savings schemes by 0.30 per cent for the second quarter.
Finance Ministry notification
The Finance Ministry takes decisions on the interest rates of Small Savings Scheme after extensive consultations. Later, the Ministry issues a notification about this decision which has a direct impact on the common people. The ministry said in the latest notification that it has been decided to increase the interest rates for some small savings schemes.
See all the changes in this chart:
These deposits will be affected
This decision of the Finance Ministry will affect the deposits already made in any scheme and the new deposits made during the first quarter. Interest rates fixed for July to September will be applicable on these. The government had issued government securities worth about Rs 4.39 lakh crore during the financial year 2022-23. To bridge the fiscal deficit in this financial year, the government wants to issue government securities (G-Sec) worth more than Rs 4.71 lakh crore against small savings schemes.
This is how interest rates are fixed
The interest rates on small savings schemes depend on the yield of government securities. The government is following it since 2016 based on the recommendations of the S Gopinath Committee. In this way, small savings schemes like National Savings Certificate (National Savings Certificate / NSC), Public Provident Fund (PPF), Kisan Vikas Patra (Kisan Vikas Patra / KVP), Sukanya Samridhi Account (SSA) The interest received is directly related to the yield of government securities.
This change happened in the first quarter
Earlier, the interest rates of only one small savings scheme were changed for the first quarter of the current financial year i.e. April-June 2023. Then the government had increased the interest on the 5-year National Savings Certificate by 0.70 percent to 7.7 percent. This was the third consecutive quarter, when the interest of one or the other small savings scheme was increased. Prior to this change, the highest interest of up to 8.2 per cent was being received on senior citizen savings schemes.
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