As interest rates in India surge, fixed-income investments like bank FDs and Senior Citizens Savings Scheme gain appeal. Despite the current high rates, they offer attractive returns. For example, Senior Citizens Savings Scheme yields 8.2%, bank FDs offer up to 7.75%, and post office deposits provide up to 7.5% annually. Even the Public Provident Fund (PPF) offers a 7.1% interest rate. Large banks like HDFC, SBI, and PNB offer competitive rates on FDs as well. The government is set to revise interest rates on these schemes at the end of September. According to experts, based on G-Sec yields and inflation projections, the rates on small savings schemes are likely to remain stable.

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Small Savings Schemes are government-managed instruments encouraging regular savings. They include savings deposits, social security schemes, and monthly income plans. Savings deposits comprise various time deposits and saving certificates like NSC and KVP. Social security schemes encompass PPF, Sukanya Samriddhi Account, and Senior Citizens Savings Scheme, while the monthly income plan consists of the Monthly Income Account.

Current interest rates for July-September 2023 are as follows:

• Savings Deposit: 4%

• 1-Year Post Office Time Deposits: 6.9%

• 2-Year Post Office Time Deposits: 7.0%

• 3-Year Post Office Time Deposits: 7%

• 5-Year Post Office Time Deposits: 7.5%

• 5-Year Recurring Deposits: 6.5%

• National Saving Certificates (NSC): 7.7%

• Kisan Vikas Patra: 7.5% (matures in 115 months)

• Public Provident Fund: 7.1%

• Sukanya Samriddhi Account: 8.0%

• Senior Citizens Savings Scheme: 8.2%

• Monthly Income Account: 7.4%

In a recent review on June 30, 2023, the government increased interest rates on various small savings schemes. It marked the fourth rate hike since September 2022, breaking a pattern of unchanged rates spanning nine quarters from Q2 2020-21 to Q2 2022-23.

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