- Interest rates on small saving schemes are generally administered by the Government of India and are fixed on a quarterly basis at a spread of 0-100 basis points (bps) over and above G-sec (Government Security) yields of comparable maturities.
- The Government has left the interest rates unchanged (since Q2 FY21), thus the current interest rates are 47-178 bps higher than the formula-based rates for Q3 FY22.
Interest Rates on Small Savings Instruments for Q3 FY22:
Small Savings Scheme
Rate of Interest (%)
for Q3 FY22)
of Interest (%) in
|Recurring Deposit Account||5||4.74||5.80||106|
|Monthly Income Scheme||5||5.98||6.60||62|
Kisan Vikas Patra (KVP)
|NSC VIII issue||5||6.14||6.80||66|
|Senior Citizens Saving Scheme (SCSS)||5||6.76||7.40||64|
|Sukanya Samriddhi Account (SSA) Scheme||21||7.13||7.60||47|
i.Small savings have become more attractive to depositors than bank deposits due to the moderation in interest rates on bank deposits and unchanged interest rates on small savings.
ii.In between March 2020 and September 2021, the deposit rates have declined by up to 180 basis points across shorter maturities (up to 1 year) and the foreign banks have deposit reduced rates by up to 195 basis points
iii.The weighted average domestic term deposit rate was reduced by 135 basis points (March 2020 to August 2021).
Who can revise the Interest Rates?
The Ministry of Finance can revise the Interest Rates of Small Savings Scheme, in exercise of the power conferred by Rule 9(1) of the Government Savings Promotion General Rules, 2018.
About Reserve Bank of India (RBI):
Establishment– April 1, 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors– Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar