The government kept interest rates stable on various small savings schemes, including popular schemes like the Public Provident Fund (PPF) and the Sukanya Samriddhi scheme, for the June quarter. Among the small savings schemes, Sukanya Samriddhi Yojana currently offers 7.6%, Senior Citizen Saving Scheme 7.4% and PPF 7.1%. On the other hand, SBI’s 5-10 year term deposits attracted interest rates of 5.50%. Interest rates for small savings plans are reviewed quarterly.
“The interest rate of the various small savings plans for the first quarter of the financial year 2022-23, beginning on April 1, 2022 and ending on June 30, 2022, remains unchanged compared to the rates in force applicable for the fourth quarter (January 1, 2022 to March 31, 2022) of fiscal year 2021-22,” the finance ministry said in a statement.
Earlier this month, the EPFO or Employees Provident Fund Organization decided to lower the interest rate to 8.1%, its lowest level in four decades, for 2021-22. The rate was 8.5% for 2020-21.
Among other small postal savings, term deposits of 1 to 5 years will continue to go from 5.5% to 6.7%. The interest rate on savings deposits will remain at 4% per annum.
The Kisan Vikas Patra will continue to offer 6.9% compounded annually and the amount invested doubles in 124 months (10 years and 4 months).
It should also be noted that from April 1, 2022, post offices will stop paying interest on retirement savings, monthly income and cash term deposit accounts. Interest will only be credited to the Account Holder’s Postal Savings Account or bank account.
In the event that the account holder is unable to link their savings account with Senior Savings, Monthly Income and Term Deposit accounts, interest due shall be paid only by credit to postal savings account or by check .
The Ministry of Post has urged holders of senior citizen savings scheme, monthly income scheme and term deposit accounts to link their savings account (post office savings account or bank account) to payment of interest.