Mumbai (TIP)- The government on Friday, December 30,  hiked the interest rates on small deposits — including post office term deposits, NSC and senior citizen savings scheme — by up to 1.1 percentage points from January 1, in line with firming interest rates in the economy. However, the interest rates on Public Provident Fund (PPF) and the girl child savings scheme Sukanya Samriddhi have not been changed.

National Savings Certificate (NSC) will yield a 7 per cent interest rate from January 1, compared to 6.8 per cent at present. Similarly, the senior citizen savings scheme will give 8 per cent interest against 7.6 per cent currently.

Interest rates on post office term deposit schemes of duration 1 to 5 years will rise by up to 1.1 percentage points.

The monthly income scheme, too, will yield 7.1 per cent interest, up from 6.7 per cent.

Revised Interest Rates On Small Savings Schemes For January-March 2023:

–              1-Year Post Office Time Deposits: 6.5 per cent

–              2-Year Post Office Time Deposits: 6.8 per cent

–              3-Year Post Office Time Deposits: 6.9 per cent

–              5-Year Post Office Time Deposits: 7.0 per cent

–              National Saving Certificates (NSC): 7.0 per cent

–              Kisan Vikas Patra: 7.2 per cent

–              Public Provident Fund: 7.1 per cent

–              Sukanya Samriddhi Account: 7.6 per cent

–              Senior Citizens Savings Scheme: 8.0 per cent

–              Monthly Income Account: 7.1 per cent.

Since May this year, the Reserve Bank of India (RBI) has raised the key repo rate by 225 basis points, prompting banks to raise interest rates on deposits as well. On December 7, the RBI increased the repo rate by 35 basis points to 6.25 per cent, the fifth-time increase in a row. The repo rate is the interest rate at which the RBI lends to the commercial bank.