Investment Schemes: Before the New Year 2023, the Narendra Modi government has given a big gift to the general public.
The government has increased the interest rates on National Savings Certificate, Post Office Fixed Deposit, Senior Citizens Savings Scheme from January 1. There has been no change in the interest rates of PPF and Sukanya Samriddhi Scheme. This increase has been done in the interest rates for the January-March quarter. The interest rate on 1-year savings scheme has been increased to 6.6%, which was earlier 5.5%. While the 2-year scheme will get interest at the rate of 6.8%, which was earlier 5.7%. The interest rate on the 3-year scheme has increased to 6.9%, which was earlier 5.8%.
At the same time, interest will be given at the rate of 7% on the 5-year scheme, which was earlier 6.7 percent. The interest rate on Senior Citizen Savings Plan has now become 8%, which was earlier 7.6%. The interest rate on Monthly Income Plan has increased to 7.1%, which was earlier 6.7%.
Apart from this, interest will now be available at the rate of 7.2 percent on Kisan Vikas Patra. At the same time, the interest rate on National Savings Certificate has been increased to 7%, which was earlier 6.8%. The Finance Ministry issued a circular on Friday evening, stating that interest rates on these small savings schemes have been increased by up to 110 basis points for the January-March 2023 quarter.
How is the interest rate decided on small savings schemes?
The government reviews the interest rates on small savings schemes every quarter. The formula for calculating the interest rate for small savings schemes was given by the Shyamala Gopinath Committee. The committee suggested that the interest rates of various schemes should be 25-100 bps higher than the yield of government bonds of similar maturity.
When was the last time interest rates increased
After about four years, the government had increased the interest rates of some small savings schemes in the last quarter. The interest rates of three small savings schemes were increased by 10 bps to 30 bps for the October-December 2022 quarter.
