Govt. hikes interest rates of many post office savings schemes

New Delhi: The government has announced an increase in interest rates for most post office saving schemes for the period of April to June 2023.

The Finance Ministry has revealed that interest rates for the popular Public Provident Fund (PPF) and savings deposits will remain at 7.1 percent and 4 percent, respectively. However, there will be an increase of between 0.1 percent and 0.7 percent in other saving schemes.

The National Savings Certificate (NSC) will see the highest increase in interest rate, from 7 percent to 7.7 percent for the April to June period. The Sukanya Samriddhi girl child savings scheme will now have an interest rate of 8 percent, up from 7.6 percent. The senior citizen savings scheme and Kisan Vikas Patra (KVP) will also have higher interest rates of 8.2 percent and 7.5 percent, respectively.

Additionally, KVP will now mature in 115 months instead of the previous 120 months. One-year term deposits with post offices will earn 6.8 percent (up from 6.6 percent), two-year deposits will earn 6.9 percent (up from 6.8 percent), three-year deposits will earn 7 percent (up from 6.9 percent), and five-year deposits will earn 7.5 percent (up from 7 percent).

The Monthly Income Scheme will also see an increase of 30 basis points to 7.4 percent. This move follows the Reserve Bank's decision to raise the benchmark lending rate by 2.5 percent to 6.5 percent since May, prompting banks to raise interest rates on deposits.

Last month, the RBI raised the repo rate by 25 basis points, marking the sixth consecutive rate hike after a 40 basis points increase in May and 50 basis points hikes in June, August, and September. Overall, the benchmark rate has been raised by 2.5 percent since May last year. Despite these changes, the interest rate for PPF remains unchanged at 7.1 percent, while savings deposits will maintain a rate of 4 percent.

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