Govt holds small savings rate steady for September quarter

New Delhi: The Union finance ministry on Friday said that interest rates on small savings schemes for the September quarter will remain unchanged at the level set for the three months through June.

The three months ending 30 September would be the third quarter in a row during which interest rates on small savings schemes are held steady. The rates were revised last in December when the government set it for the March quarter of FY24, as per official orders.

The highest rate of 8.2% is applicable for both the Sukanya Samriddhi account scheme and the senior citizen savings scheme. The Sukanya Samriddhi scheme is backed by the government and helps parents to build a corpus for the girl child’s education.

Small saving schemes

The National Savings Certificate scheme fetches 7.7% interest rate, while Kisan Vikas Patra and five-year time deposit each fetches 7.5% interest. Time deposits of one to five years earn interest at rates ranging from 6.9% to 7.5%.

Small savings schemes are important for the masses as these offer convenient and risk-free savings options. Some of these instruments, for example, the National Savings Certificate, Senior Citizen Savings scheme and Sukanya Samriddhi Yojana are eligible for income tax benefit under section 80 C of the Income Tax Act. Under this, investments up to ₹1.5 lakh in a year is allowed as deduction while calculating the taxable income.