Small savings schemes: The central government has kept the interest rates unchanged on various small savings schemes for the January-March quarter of the financial year 2024-25 (Q4FY25). According to an official notification by the finance ministry on Tuesday, December 31, the government left the interest rates unchanged on various small savings schemes, including PPF and NSC, for the fourth straight quarter beginning January 1, 2025.
“The rates of interest on various small savings schemes for the fourth quarter of FY 2024-25, starting from January 1, 2025, and ending on March 31, 2025, shall remain unchanged from those notified for the third quarter (October 1, 2024, to December 31, 2024) of FY 2024-25,” said the finance ministry.
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Small savings schemes: Interest rates on PPF, SSY, SCSS
According to the notification, the interest rates for the popular Public Provident Fund (PPF) and post office savings deposit schemes, too, have been retained at 7.1 per cent and four per cent, respectively. PPF is widely favoured due to its tax benefits and long-term savings potential.
The Kisan Vikas Patra (KVP) interest rate will be 7.5 per cent, and the investments will mature in 115 months. KVP is a government-backed savings scheme designed to double the investment over a specific period. The Post Office Monthly Income Scheme (PO-MIS), which provides regular monthly income to investors, will offer an interest rate of 7.4 per cent.
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The Senior Citizen Savings Scheme (SCSS) will also maintain its interest rate at 8.2 per cent. This scheme is specifically designed to provide financial security to senior citizens, offering higher returns compared to other savings options.
The interest rate on the National Savings Certificate (NSC), a fixed-income investment plan, will remain at 7.7 per cent from January to March 2025. Like the current quarter, the Monthly Income Scheme will earn 7.4 per cent for investors. This scheme is considered a secure investment with moderate returns.
Deposits made under the Sukanya Samriddhi Yojana (SSY), which encourages savings for the education and marriage expenses of girls, will continue to earn an interest rate of 8.2 per cent, while the rate on a three-year term deposit remains at 7.1 per cent prevailing in the current quarter. This scheme is integral to the government’s ‘Beti Bachao Beti Padhao’ initiative.
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Additionally, the five-year recurring Deposit (RD) scheme, which allows investors to deposit a fixed amount monthly, will offer an interest rate of 6.7 per cent. These small savings schemes offer guaranteed returns at regular intervals, compounded monthly, quarterly or annually, as the case may be.
The government notifies the interest rates on small savings schemes, which are mainly operated by post offices and banks, every quarter. The Shyamala Gopinath Committee provided the formula for arriving at the interest rates for a small savings scheme. The committee suggested that yields on government bonds should be the benchmarks for the interest on various small savings instruments and that they should be reset every first of April.