Government of India announces interest rate on small saving schemes like PPF, Senior Citizen Savings Scheme, Post Office Fixed and Recurring Deposits and Sukanya Samriddhi Account every quarter effective April 2016.
This is done to keep these interest rates in sync with the market rates.
The table below shows the interest reset schedule:
Interest Rates for Q4 FY 2017-18 (Jan – Mar’18)
The interest rate on small saving schemes have been reduced by 0.2% (except for Senior Citizens Saving Scheme) for January 1, 2018 to March 31, 2018 quarter.
- There is No change in Senior Citizens Saving Scheme interest rate and would offer 8.3%
- PPF and NSC will fetch a lower annual rate of 7.6% while KVP will yield 7.3% and mature in 118 months.
- Sukanya Samriddhi Account will offer 8.1% from existing 8.3% annually
- Term deposits of 1-5 years will fetch a lower interest rate of 6.6% – 7.4%, to be paid quarterly, while the five-year recurring deposit is pegged at 6.9%.
- Post Office Savings Account Interest Rate has been kept at 4%.
Also Read: NSC is better than Tax Saving Bank FD!
Download the Official Notification from here. There is typo in date 31.04.2018 is actually 31.03.2018!
Interest Rates for Q2/3 FY 2017-18 (July – Dec’17)
The interest rate on small saving schemes have been reduced by 0.1% from July 2017 for the quarter of July to December 2017.
Interest Rates for Q1 FY 2017-18 (April – June’17)
The interest rates for April to June’17 quarter have been reduced by 0.1% for all schemes except savings account. The table below gives the details:
How are Interest Rates Determined?
For long term and socially important small saving schemes like PPF, SCSS, Sukanya Samriddhi Scheme, NSC and 5 Year post office fixed deposit the rates are fixed as slight mark up to the government bond yields.
For other small saving schemes namely Post Office Fixed Deposits (1, 2 and 3 years tenure), Recurring Deposits and Kisan Vikas Patra the interest rates would be market determined, which means would be similar to that offered by banks on corresponding deposits.
The table below gives the markup factor:
Unfortunately government is not following the above rules. There have been substantial reduction in benchmark yields but is not reflected in small saving schemes – which is good news for investors.
Small Saving Scheme Interest Rates History:
You can click on relevant links to go to historical interest rates:
- Interest Rates for Q3 FY 2016-17 (October – December)
- Interest Rates for Q2 FY 2016-17 (July – September)
- Interest Rates for Q1 FY 2016-17 (April – June)
- Interest Rates for FY 2015-16
- Interest Rates for FY 2014-15
- Interest Rates for FY 2013-14
- Interest Rates for FY 2012-13
- Interest Rates for FY 2011-12
The interest offered are locked-in for Post Office Fixed Deposits, Recurring Deposits, POMIS, KVP, NSC and Senior Citizen Savings Scheme and so the interest offered is as on the date of investment for the entire tenure.
However for Sukanya Samriddhi Account and PPF the interest is offered as declared every quarter irrespective of the time of opening of account.
You can bookmark this page as we would update this every quarter as and when the new interest rates are declared.