Centre hikes interest rates on small savings schemes by up to 70 basis points

New income tax rules

NEW DELHI: The Centre on Friday boosted the interest rates of small savings programmes by up to 70 basis points for the April-June 2023 quarter. Interest rates have increased for programmes including the Sukanya Samriddhi Account Scheme, National Savings Certificate, Kisan Vikas Patra, Senior Citizen Savings Plan, and Monthly Income Savings Scheme.
The Public Provident Fund (PPF) interest rate has remained constant at 7.1%.
The NSC interest rate has increased by the most, by 70 basis points, and is now 7.7%; the SCSS interest rate has increased by 20 basis points, from 8% to 8.2%.
As stated in the Union Budget for 2023, the SCSS deposit ceiling is also anticipated to rise to Rs 30 lakh per account.
Since May 2022, the Reserve Bank of India (RBI) has started raising key rates.

The Center has raised the interest rates on small savings programmes three times in the past nine months. Banks have been raising interest rates on fixed deposits (FD) as a result, which is excellent news for FD investors who have been stuck with decadal-low interest rates.

While government bond rates have increased, the most recent interest rate increase was anticipated. Small savings rates are based on yields on bonds with the same duration and are updated every three months. Small savings rates have been raised as a result of the recent substantial increase in bond yields.