Government sticks to current small savings scheme rates for Q1 2024-25

Unchanged savings rates: The government has decided to maintain the existing interest rates for small savings schemes during the first quarter of the fiscal year 2024-25, running from April to June. This announcement marks a departure from the regular practice of adjusting these rates every quarter.

The Finance Ministry, responsible for reviewing these rates, has opted not to make any changes this time around, keeping them consistent with the rates set for the previous quarter, which spanned from January to March 2024.

"The rates of interest on various Small Savings Schemes for the first quarter of FY 2024-25 starting from 1st April, 2024 and ending on 30th June, 2024 shall remain unchanged from those notified for the fourth quarter (1st January, 2024 to 31st March, 2024) of FY 2023-24. This has the approval of the competent authority," a government notification said.

Steady with exceptions

This decision comes following a period where the rates remained stable, after a series of adjustments that saw some schemes' rates being increased, such as the Sukanya Samriddhi Scheme and 3-year Time Deposit, during the fourth quarter of the fiscal year 2023-24, by up to 20 basis points. However, the majority of schemes' rates remain unaltered.

Prior to this, the rates had seen a significant period of consistency, with no adjustments made for nine consecutive quarters, following which there were increments from the October-December quarter of 2022, post the pandemic period.

The Public Provident Fund (PPF) rates, in particular, have remained unchanged for over three years, with the last alteration occurring in the April-June quarter of 2020, which saw a reduction from 7.9 per cent to 7.1 per cent.

Current Interest Rates for Various Small Savings Schemes for the First Quarter of FY25:

For savings deposit, the interest rate stands at 4.0 per cent, while a one-year-time deposit offers 6.9 per cent. Two-year and three-year time deposits come with interest rates of 7.0 per cent and 7.1 per cent respectively, while the five-year time deposit yields 7.5 per cent.

Additionally, a five-year recurring deposit earns interest at a rate of 6.7 per cent. For senior citizens, the Senior Citizen Savings Scheme provides a higher interest rate of 8.2 per cent. The Monthly Income Account offers a return of 7.4 per cent, while the National Savings Certificate stands at 7.7 per cent.

The Public Provident Fund Scheme and the Sukanya Samriddhi Account Scheme both have interest rates of 7.1 per cent and 8.2 per cent respectively. Lastly, the Kisan Vikas Patra, with a maturity period of 115 months, offers an interest rate of 7.5 per cent.

The government's decision to maintain the current rates signifies a period of stability in the small savings schemes, offering investors a predictable environment for their financial planning.