Centre raises interest rate on small savings schemes for Apr-Jun quarter; check details
New Delhi, April 1: The government has increased the interest rate on several Small Savings Schemes by up to 70 basis points (100 basis point is equal to 1 percentage point) for the first quarter of the fiscal year 2023-24, which begins today (April 1).
The government normally reviews the interest rates on small savings schemes every quarter. The Shyamala Gopinath Committee provided the formula for calculating interest rates for a small savings scheme. The committee proposed that government bond yields serve as the benchmark for interest rates on various small savings instruments and that they be reset every April 1st.
The Senior Citizen Savings Scheme interest rate was raised by 20 basis points, the National Savings Certificate by 70 basis points, Kisan Vikas Patra by 30 basis points, and the Sukanya Samriddhi Yojana by 40 basis points.
Also Read | Indian family among 8 found dead in bid to enter US from Canada
Meanwhile, the Reserve Bank of India (RBI) has been gradually raising the repo rate since May 2022 in order to combat rising inflation. Banks are raising interest rates in response to the RBI's rate hike, which is good news for various deposit schemes.
The RBI's Monetary Policy Committee (MPC) decided in early February to raise the repo rate by 25 basis points to 6.5 percent in order to anchor inflation expectations, break the persistence of core inflation, and boost medium-term development prospects.
Increasing interest rates is a monetary policy tool that normally helps to reduce demand in the economy, allowing the inflation rate to fall. When Covid started in early 2020, the repo rate was 4%.
Also Read | Full emergency declared at Delhi airport after FedEx plane suffers bird-hit