The Ministry of Finance on Thursday kept interest rates of small savings schemes comprising Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY), other post office schemes unchanged for the sixth quarter in a row for the October-December quarter.
This means that the interest rates earned in the July to September quarter of FY22 will be same for the next quarter. In addition, new investments made during the October-December 2021 quarter will also garner same interest rates as in the previous quarter.
As per ministry’s circular, PPF will continue to earn 7.10%, the NSC will fetch 6.8%, and Post Office Monthly Income Scheme Account will earn 6.6%, as well as for Senior Citizen Savings Scheme, the interest rate is 7.4%.
The 5-year Monthly Income Account Scheme is offering 6.6 per cent payable monthly, while the 5-year NSC continues to offer 6.8 per cent compounded annually. On the 1-year time deposit, the rate of interest stands at 5.5 per cent while on the 5-year deposit, the rate is 6.7 per cent per annum.
“The rates of interest on various small savings schemes for the third quarter of the financial year 2021-22 starting from October 1, 2021, and ending on December 31, 2021, shall remain unchanged from the current rates applicable for the second quarter (June 1, 2021 to September 30, 2021) for FY 2021-22,” the finance ministry said in a notification.
Interest rates for small savings schemes are notified on a quarterly basis.
One-year term deposit scheme will continue to earn an interest rate of 5.5 per cent, while the girl child savings scheme Sukanya Samriddhi Yojana account will earn 7.6 per cent.
The interest rate on the five-year senior citizens savings scheme would be retained at 7.4 per cent. The interest on the senior citizens’ scheme is paid quarterly.
Interest rate on savings deposits will continue to be 4 per cent per annum.
Term deposits of one to five years will fetch interest rate in the range of 5.5-6.7 per cent, to be paid quarterly, while the interest rate on five-year recurring deposits will earn a higher interest of 5.8 per cent.
The small savings schemes will continue to fetch small investors better rates than other fixed income avenues such as bank fixed deposits (FDs).
For example, the five-year fixed deposit under Post Office Savings Scheme gives a 6.7% interest rate. Top banks in India generally offer 5.4-5.5% interest rates on a fixed deposit of the same period.
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