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|
|Post Office Savings Account (SB)||–||4.0||Annually|
|National Savings Recurring Deposit Account||5||5.8||Quarterly|
|Senior Citizens Savings Scheme Account (SCSS)||5||7.4||Quarterly and Paid|
|NSC (VIII Issue)||5||6.8||Annually|
|Kisan Vikas Patra (KVP)||124 Months||6.9||Annually|
|Sukanya Samriddhi Account (SSA) Scheme||21||7.6||Annually|
|Monthly Income Scheme (MIS)||5||6.6||Monthly and Paid|
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)