Government hikes interest rates on Sukanya Samriddhi scheme

On Friday, the government increased the interest rates on the Sukanya Samriddhi scheme by 20 basis points and the three-year term deposit scheme by 10 basis points for the January-March quarter. However, rates for all other small savings schemes remained unchanged.

According to a finance ministry circular, the deposit under Sukanya Samriddhi scheme would attract an interest rate of 8.2 per cent from the existing 8 per cent, while the 3-year term deposit would become 7.1 per cent from the current 7 per cent.

Nevertheless, the interest rates for widely used PPF (Public Provident Fund) and savings deposits have been maintained at 7.1 percent and 4 percent, respectively, consistent with the rates observed in the December quarter.

The interest rate on the Kisan Vikas Patra is 7.5 per cent and the investments will mature in 115 months. The interest rate on the National Savings Certificate (NSC) remained unchanged at 7.7 per cent for January 1 to March 31, 2024, period. There is no increase in interest rate for the Monthly Income Scheme, and this will earn 7.4 per cent for the investors.

The government issues notifications regarding the interest rates on small savings schemes, predominantly managed by post offices, on a quarterly basis. Since May 2022, the Reserve Bank has increased the benchmark lending rate by 2.5 percent to reach 6.5 percent, leading banks to raise interest rates on deposits accordingly.