Government Keeps Interest Rates for Small Savings Schemes Unchanged for Q4 of FY24-25
New Delhi [India], December 31: The central government has decided to maintain the interest rates on various small savings schemes for the January-March quarter of the Financial Year 2024-25, as per an official notification released by the Ministry of Finance.
According to the notification, the interest rates for small savings schemes will remain the same for the second quarter of FY 2024-25, beginning on January 1, 2025, and ending on March 31, 2025. The rates will be identical to those set for the first quarter of the fiscal year, which runs from October 1, 2024, to December 31, 2024.
These rates are typically reviewed by the government every quarter to keep them in line with prevailing economic conditions. Here is a summary of the key small savings schemes and their interest rates for the upcoming quarter:
- Public Provident Fund (PPF): The interest rate for PPF, one of the most popular small savings options, will continue at 7.1%. Known for its tax advantages and long-term growth potential, this scheme remains a top choice for savers.
- Senior Citizen Savings Scheme (SCSS): Senior citizens will continue to enjoy a rate of 8.2% on their deposits under the SCSS. This scheme is tailored to offer higher returns, providing a reliable source of income and financial security for older individuals.
- Sukanya Samriddhi Yojana: Aimed at promoting savings for the education and marriage expenses of girl children, the interest rate on this scheme will remain at 8.2%. It is part of the government’s larger ‘Beti Bachao Beti Padhao’ initiative, which encourages the empowerment of girls.
- National Savings Certificate (NSC): The fixed-income NSC will offer an interest rate of 7.7%. It is a secure investment option, providing moderate returns for those looking for a stable savings plan.
- Post Office Monthly Income Scheme (PO-MIS): For those seeking regular monthly income, the PO-MIS will continue to offer a rate of 7.4%. This scheme provides a steady income for savers, compounded monthly.
- Kisan Vikas Patra (KVP): The KVP, designed to double the investment over a specified period, will retain its interest rate of 7.5%. This scheme remains a popular choice for long-term savers.
- 5-Year Recurring Deposit (RD): The 5-Year RD scheme, which allows individuals to make monthly deposits, will offer an interest rate of 6.7%. This scheme is perfect for investors looking to accumulate savings through regular contributions.
These small savings schemes continue to provide guaranteed returns at regular intervals, with interest being compounded either monthly, quarterly, or annually, depending on the specific scheme.
The interest rates for these schemes are determined based on a formula recommended by the Shyamala Gopinath Committee. The committee had proposed using yields on government bonds as the benchmark for determining the rates, which should be adjusted annually, every April.
