Exploring Small Savings Schemes: April-June 2024 Interest Rates

As the Reserve Bank of India (RBI) maintains key interest rates and the government keeps small savings scheme rates unchanged for April-June 2024, it’s crucial to understand the latest rates and how they compare with bank fixed deposit (FD) rates.

Latest Interest Rates On Small Savings Schemes

Scheme Interest Rate
Savings Deposit 4%
1-Year Post Office Time Deposits 6.9%
2-Year Post Office Time Deposits 7.0%
3-Year Post Office Time Deposits 7.1%
5-Year Post Office Time Deposits 7.5%
5-Year Recurring Deposits 6.7%
National Saving Certificates (NSC) 7.7%
Kisan Vikas Patra 7.5% (will mature in 115 months)
Public Provident Fund (PPF) 7.1%
Sukanya Samriddhi Account 8.2%
Senior Citizens Savings Scheme 8.2%
Monthly Income Account 7.4%

Interest Rates On Bank FD

Currently, major banks offer interest rates up to 7.75% depending on deposit tenure and depositor’s age. For example:

  • HDFC Bank: Up to 7.75%
  • ICICI Bank: Up to 7.60% annually
  • SBI: Up to 7.50% a year

Comparing these rates with small savings schemes reveals that while some schemes offer competitive rates, others may not. It’s essential to weigh the options based on your financial goals and risk tolerance.

What Are Small Savings Schemes?

Small Savings Schemes, managed by the government, aim to promote regular saving habits among citizens. These schemes encompass three categories:

  1. Savings Deposits: Include time deposits and recurring deposits ranging from 1 to 5 years.
  2. Social Security Schemes: Comprise schemes like PPF, Sukanya Samriddhi Account, and Senior Citizens Savings Scheme.
  3. Monthly Income Plan: Such as the Monthly Income Account.

Popular schemes like PPF, NSC, and KVP offer market-linked rates that move with 10-year G-Sec yield, providing potential for higher returns.

It’s noteworthy that interest rates on small savings schemes are reviewed quarterly. While the recent rates remain unchanged for April-June 2024, understanding the market dynamics can help in making informed investment decisions.

Ultimately, whether you opt for bank FDs or small savings schemes, it’s essential to align your choice with your financial objectives and risk appetite.


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