Hiked Interest Rates for Small Savings Schemes from Dec 2022: Ministry of Finance

The interest rates for small savings schemes like post office deposits and senior citizens' savings schemes have been hiked as declared by the Finance Ministry.

Fixed Deposit of SBI for 1-3 years of maturity gets around 6.75% of interest. Last year the provident fund earned deposits of 8.1%, however this year’s rate is pending. For a one year Fixed Deposit the previous rate of interest was 5.5% which has been renewed at 6.6%. Similarly, Five-year-old fixed deposits previously accounted for 6.7% interest rate, the new revised rate is 7.0%. 

In contrast, Senior Citizen Schemes were at 7.6% interest rate which has now increased to 8.0%. Monthly Income Scheme has been hiked from 6.6% to 7.1% and interest rate of National Savings Certificate was hiked from 6.8 to 7.0%. Interest rates of Kisan Vikas Patra increased 0.2% from 7 to 7.2% as well as maturity from 120 months to 123 months. Public Provident Fund and Sukanya Smridhi remained with the previous interest rate. 

Banks have begun raising interest rates since the Reserve Bank of India (RBI) raised repo rates by 0.35% to 6.25% at its December’s monetary policy meeting. The hike was ensued by RBI raising multiple interest increases which is why banks provide higher returns on fixed deposits.