Retail investors are set to earn a higher income on their investment in small savings scheme as the Government of India has recently raised interest rates on these schemes for the June quarter of 2023-24.
The department of Economic Affairs in the ministry of Finance recently revised the interest rates for small saving schemes for the first quarter of financial year 2023-24 starting from April 1, 2023 and ending on June 30, 2023, stated the budget division in a recently released statement.
According to the announcement, saving deposit rates of interest will continue to remain 4 percent in the June quarter as in the March quarter. At the same time, interest rates for one-year time deposit have been raised by 20 basis points from 6.6 percent to 6.8 percent.
The 2-year time deposit saw an increase of 10 basis points from 6.8 percent to 6.9 percent from March quarter to June quarter. Similarly, 3-year time deposits witnessed a 10 basis points increase from 6.9 percent to 7 percent during this period.
However, the 5-year time deposit saw a 50 basis points increase from 5.8 percent to 6.2 percent. The five-year recurring deposit interest rates rose from 5.8 percent to 6.2 percent from March quarter to June quarter
| Small Savings Scheme | Interest rate March quater (%) | Interest rate June quarter (%) |
| Saving deposit | 4 | 4 |
| 1-year time deposit | 6.6 | 6.8 |
| 2 year time deposit | 6.8 | 6.9 |
| 3 year time deposit | 6.9 | 7 |
| 5 year time deposit | 7 | 7.5 |
| 5 year recurring deposit | 5.8 | 6.2 |
| Senior citizen savings scheme | 8 | 8.2 |
| Monthly income account scheme | 7.1 | 7.4 |
| National Savings Certificate | 7 | 7.7 |
| PPF scheme | 7.1 | 7.1 |
| Kisan Vikas Patra | 7.2 | 7.5 |
| Sukanya Samridhi Account | 7.6 | 8 |
(Source: Budget division, DoEA)
The senior citizen savings scheme saw an increase of 20 basis points from 8 percent to 8.2 percent. The monthly income account scheme saw an increase of 30 basis points from 7.1 percent to 7.4 percent.
The national savings certificate reported an increase of 70 basis points from 7 percent to 7.7 percent. The Kisan Vikas Patra reported an increase of 30 basis points from 7.2 percent to 7.5 percent.
Finally, Sukanya Samriddhi Account Scheme reported an increase of 40 basis points from 7.6 percent to 8 percent.
However, public provident fund (PPF) scheme's interest rate will remain same at 7.1 percent.
