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Government Unchanged the Interest Rate of Small Savings Schemes for Q4 of FY22

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Govt retained interest rates on small savings schemes for the fourth quarter of FY22

Ministry of Finance, Department of Economic Affairs (Budget Division), has maintained the status quo and retained the Interest Rate of Small Savings Scheme unchanged for the 4th Quarter (Q4) for the Financial Year 2021-22 (FY22) (i.e. from January 2022 to March 2022) same as Q3 FY22 due to the rising cases of COVID-19 variant Omicron and elevated level of inflation.

  • The interest rates on various small savings instruments such as Public Provident Fund (PPF), National Savings Certificate (NSC), term deposits in post offices, etc remain unchanged from Q2 FY21 (around 7 quarters).

Interest Rates on Small Savings Instruments for Q4 FY22:

Small Savings Scheme Maturity (years)Rate of Interest (%)  (applicable for Q4 FY22)Compounding Frequency
PPF15 7.1Annually
Post Office Savings Account (SB)​4.0Annually

Term  Deposits

1 Year15.5Quarterly
2 Year25.5Quarterly
3 Year35.5Quarterly
5 Year56.7Quarterly
National Savings Recurring Deposit Account55.8Quarterly
Senior Citizens Savings Scheme Account (SCSS)​57.4Quarterly and Paid
NSC (VIII Issue)56.8Annually
Kisan Vikas Patra (KVP)124 Months6.9Annually
Sukanya Samriddhi Account (SSA) Scheme217.6Annually
Monthly Income Scheme (MIS)56.6Monthly and Paid

Additional info:

i.West Bengal is the highest contributor to the small savings schemes followed by Uttar Pradesh.

ii.The interest rates for small savings schemes are arrived at by using the formula which was given by the Shyamala Gopinath Committee.

iii.The committee had suggested that the interest rates of different schemes should be 25-100 bps higher than the yields of the government bonds of similar maturity.

Who can revise the Interest Rates?

The Ministry of Finance can revise the Interest Rates of Small Savings Scheme, in the exercise of the power conferred by Rule 9(1) of the Government Savings Promotion General Rules, 2018.

How often the Rate of Interest will be revised?

The Rate of Interest of Small Savings Scheme will be revised by the Ministry of Finance once in 3 Months (every Quarter of the FY) (i.e. (April-June), (July – September), (October – December),(January-March)).

Recent Related News:

In its October 2021 Bulletin, the Reserve Bank of India (RBI) has pointed out the increasing interest burden on the government due to unchanged interest rates on various small savings instruments such as PPF, NSC, term deposits in post offices

About Ministry of Finance (MoF):

Union Minister – Nirmala Sitharaman (Constituency – RajyaSabha, Karnataka)

Minister of State – Pankaj Chaudhary (Constituency – Maharajganj, Uttar Pradesh); Dr. Bhagwat Kishanrao Karad (Constituency – Rajya sabha Maharashtra)