With the hike, the Centre has increased the interest rates for some schemes in back-to-back quarters.
In a welcome update for lakhs of senior citizens and common savings scheme account holders, the government has increased the interest rates for several small savings schemes. Schemes which have seen an interest rate hike are Kisan Vikas Patra (KVP), national saving certificate (NSC), senior citizen savings scheme and post office savings schemes.
Interest rates for NSC, KVP and senior citizen savings scheme have been increased by up to 1.1 percentage points. Similar hike has been made for deposits up to 5 percent. The changes would apply between January 1 and March 31, 2023, the Finance Ministry notification said.
Interest rates of some popular schemes have been left unchanged. These include PPF (7.1 percent) and Sukanya Samriddhi Yojana (7.6 percent). With the hike, the centre has increased the interest rates for some schemes in back-to-back quarters. Before that, the interest rates had remained constant for nine quarters straight. Interest rates for small savings schemes are normally revised in every quarter.
Changes after latest interest rate hikes
Term deposit will post office will receive:
- One-year deposit: 6.6 percent
- Two-year deposit: 6.8 percent
- Three-year deposit: 6.9 percent
- Five-year deposit: 7 percent
Interest rate for Senior Citizen Savings scheme will increase by 40 basis points at 8 percent in January-March period.
Kisan Vikas Patra (KVP) interest rate has been hiked from 7 percent to 7.2 percent. The maturity period has been reduced from 123 months to 120 months.
For Monthly Income Scheme, an increase of 40 basis points to 7.1 percent. Interest rate for NSC has been hiked to 7 percent by 20 basis points. Interest rate on savings deposits will stay at 4 percent per annum.
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 "Good news for senior citizens, NSC, KVP, PO savings scheme account holders, interest rates hiked; details inside")
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