New Delhi [India]: The central government has decided to maintain the current interest rates on various small savings schemes for the January-March quarter of the financial year 2024-25, according to an official notification from the Ministry of Finance.
“The rates of interest on various Small Savings Scheme for the second quarter of FY 2024-25 starting from 1st January 2025 and ending on 31st March 2025 shall remain unchanged from those notified for the first quarter (1st October 2024 to 31st December 2024) of FY 2024-25,” the Finance Ministry stated in its notification.
The government reviews the interest rates on small savings schemes every quarter. For this quarter, the rates will remain as follows:
- Public Provident Fund (PPF): The interest rate remains at 7.1 per cent, continuing to attract investors due to its tax benefits and long-term savings potential.
- Senior Citizen Savings Scheme (SCSS): Designed for senior citizens, this scheme will maintain an interest rate of 8.2 per cent, offering higher returns compared to other savings options.
- Sukanya Samriddhi Yojana: This scheme, aimed at promoting savings for a girl’s education and marriage, will offer an interest rate of 8.2 per cent, supporting the government’s ‘Beti Bachao Beti Padhao’ initiative.
- National Savings Certificate (NSC): A fixed-income investment plan, NSC will retain its interest rate of 7.7 per cent, ensuring secure and moderate returns for investors.
- Post Office Monthly Income Scheme (PO-MIS): Providing regular monthly income, this scheme will continue with an interest rate of 7.4 per cent.
- Kisan Vikas Patra (KVP): Designed to double the investment over a specified period, KVP will maintain an interest rate of 7.5 per cent.
- 5-Year Recurring Deposit (RD): This scheme will offer an interest rate of 6.7 per cent, allowing fixed monthly deposits with compounded returns.
Small savings schemes are popular for their guaranteed returns, which are compounded at intervals (monthly, quarterly, or annually) as per the scheme’s terms.
The Shyamala Gopinath Committee’s formula guides the determination of these rates, benchmarking them to yields on government bonds. As per the committee’s recommendation, interest rates are typically reset every April 1.