Interest rates of some small saving schemes hike: PPF remains same

Interest rates of some small saving schemes hike: PPF remains same

The Union government has recently decided to increase the rate of interest on Sukanya Samriddhi Account Scheme (SSAS) and 3 years time deposits for the first quarter of 2024. Along with that the interest rate of the Public Provident Fund doesn’t see any hike and remains frozen.

Rate hikes on SSAS and 3 years term deposits:

The Union government on 29 December released a notification regarding the hike of rate of interest on Sukanya Samriddhi Account Scheme from 8 percent to 8.2 percent and on 3 years term deposits the interest rate would be 7.1 percent from 7 percent. Even though these are minor relief for the upcoming new year, the positive approach of the central government can be seen clearly.

PPF still frozen:

Apparently the Public Provident Fund scheme has witnessed the significantly high returns after the lok sabha election in January 2019, but the interest rate of this scheme hasn’t seen any hike from the government for another quarter at 7.1 percent.

The internet rate of the Public Provident Fund has not seen any increase since April 2020 and this is the sixth time when some selected small savings schemes see hikes.

About small saving schemes:

Small savings schemes of government are the most preferable choice of investment for the citizens of India. Some important small saving schemes include:

• Sukanya Samriddhi Account Scheme
• Public Provident Fund
• Post office deposit schemes
• Senior citizen saving scheme
• National saving certificate
• Kisan Vikas Patra

Sukanya Samriddhi Account Scheme:

The Sukanya Samriddhi Account Scheme was launched by the prime Minister Narendra Modi in the year of 2015 under the “Beti Bachao beti padhao” campaign. It ensures the protection of girl children in the financial term. It is operationalised jointly by the Ministry of Women and Child Development, Ministry of Human Resource Development, and the Ministry of Health and Family Welfare.

Interest rate: 8.2 percent ,Jan- March 2024

Public Provident Fund:

The Public Provident Fund scheme is a long term savings scheme first offered in the year of 1968 by the Finance Ministry’s National Savings Institute. The main objective of this scheme is to encourage the individuals to start small savings and get returns on that savings.

Interest rate: 7.1 percent

Senior citizen saving scheme:

The main objective of this scheme is to provide financial assistance to an individual when he or she attains the age of 60 years. It was launched on 2004 by the government of India under the Department of Economic Affairs, ministry of finance.

Interest rate: 8.2 percent

Conclusion:

Small saving schemes play a crucial role to encourage the participants to save money and get interest on these schemes. It eventually benefits the growth of the economy and leads to the holistic Development of the country.

Important Questions:

1. What is a small saving scheme? Give some examples.
2. Describe the recent changes in the interest rates of small savings schemes by the government.

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