Govt keeps interest rates on small savings schemes unchanged for Q2FY23

The government on Thursday kept interest rates unchanged on small savings schemes, including NSC and PPF, for the second quarter of 2022-23 amid high inflation and rising interest rate.

The interest rate on small savings schemes has not been revised since the first quarter of 2020-21.

Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to have an annual interest rate of 7.1 per cent and 6.8 per cent, respectively, in the second quarter of this fiscal.

"The rates of interest on various small savings schemes for the second quarter of the financial year 2022-23, starting from July 1, 2022, and ending on September 30, 2022, shall remain unchanged from those notified for the first quarter (April 1, 2022, to June 30, 2022) for FY 2022-23," the finance ministry said in a notification.

Interest rates for small savings schemes are notified on a quarterly basis.

The one-year term deposit scheme will continue to earn an interest rate of 5.5 per cent in the second quarter.

It is to be noted that the country's biggest lender State Bank of India (SBI) raised interest rate on one-year fixed deposit 5.10 per cent following two consecutive increase in benchmark rate by 90 basis points to tame high inflation.

Reserve Bank of India (RBI) raised repo rate by 40 basis points and 50 basis points in May and June, respectively.

Retail inflation stood at 7.04 per cent in May, remaining above the RBI's tolerance level for the fifth month in a row.

The interest rate on the five-year senior citizens' savings scheme will be retained at 7.4 per cent. The interest on the senior citizens' scheme is paid on a quarterly basis.

The girl child savings scheme Sukanya Samriddhi Yojana will fetch 7.6 per cent.

The interest rate on savings deposits will continue to be at 4 per cent per annum.

Term deposits of one to five years will fetch an 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.