BENGALURU: In what could bring a big smile to the face of small savers, the government has increased the interest rates on some small savings schemes that don’t get tax benefits. This is for the first time since January 2019 that the rates on these schemes have been revised upwards.
From next month, the Senior Citizen Savings Scheme will earn a 7.6 per cent interest rate instead of 7.4% now. The rates on two and three-year post office deposits have been raised from 5.5% to 5.7% and 5.8%, respectively. The interest rate on the Monthly Income Account Scheme has also been increased, from 6.6% to 6.7%.
However, the government has not extended the relief to all as the rates of popular instruments such has the Public Provident Fund Scheme (7.1%), National Savings Certificate (6.8%) and Sukanya Samriddhi (7.6%) remain unchanged.
The interest rates on small savings schemes are linked to yields on government securities. The RBI has raised the benchmark lending rate by 1.4% since May, nudging the yield on government bonds to go up. Many banks have raised rates on fixed deposits. But bank fixed deposits up to fiveyear tenure still earn less than 6% per annum as interest.
As for Kisan Vikas Patra, the government has raised the rate from 6.9% to 7% while the tenure has been tweaked.