Small Savings Schemes' Rates Up By 20 bps In Q4FY24: Sukanya Samriddhi, PPF, Others
The Union finance ministry recently announced revised interest rates for various small savings schemes for the January-March 2024 quarter. Notably, certain schemes like the Sukanya Samriddhi Scheme and the 3-year Time Deposit witnessed slight adjustments in their interest rates. The Sukanya Samriddhi Scheme's interest rate climbed to 8.2 per cent, while the 3-year Time Deposit saw an uptick to 7.1 per cent for this quarter, marking a marginal increase from the previous rates of 8.0 per cent and 7.1 per cent, respectively.
Throughout the past few years, rates for schemes like the Public Provident Fund (PPF) remained unchanged, with the last alteration recorded in April-June 2020, leading to a reduction from 7.9 per cent to the current 7.1 per cent. These adjustments come against a backdrop where small savings rates previously fluctuated between 4 per cent for post office savings deposits and 8.2 per cent for the Senior Citizens Savings Scheme.
It's worth noting that these small savings schemes, offering tax-saving benefits under Section 80C of the Income Tax Act, experience periodic rate revisions. These revisions align with market rates and the yields of government securities, allowing for adjustments every quarter. This practice aims to ensure competitiveness and market relevance for these savings avenues, catering to individual tax-saving objectives.
Additionally, the previous stance by the NDA government emphasised that the interest rates offered through various Small Savings Schemes were relatively more appealing compared to fixed deposit schemes provided by both public and private banks. This affirmation indicated the government's efforts to maintain the attractiveness and competitiveness of these schemes in the larger financial landscape.
