The government has notified the interest rate on Public Provident Fund (PPF), Sukanya Samriddhi Account, Kisan Vikas Patra, National Savings Certificate (NSC) and Other Small Savings Scheme for quarter 3 of the Financial Year 2022-23 to begin from 1st October 2022 and ending on 31.12.2022.
For the third quarter of the current fiscal year 2022-23, the interest rate on certain savings schemes has been increased after a long period of time whereas, in the case of the remaining schemes, the rate of interest has been kept unchanged compared to the interest rate notified for the second quarter of the FY 2022-23. The increase in rates of interest is ranging from 10 bp to 30 bp. However, there is no decrease in the interest rate in any of the savings schemes for the third quarter from the interest rates prevailing for the second quarter of the fiscal.
The interest rate on these Small Savings Schemes including Public Provident Fund (PPF), Sukanya Samriddhi Account, and National Savings Certificate (NSC) has been kept unchanged for the third quarter of the fiscal year 2022-23 commencing from 1st October 2022. PPF will continue to earn interest of 7.1 per cent for the 2nd quarter of FY 2022-23. The National Savings Certificate (NSC) will continue to carry an annual interest rate of 6.8% for the same period whereas Sukanya Samriddhi Account (SSA) will fetch the same rate of interest at 7.6%.
Whereas, the interest rate on 2-year and 3-year time Deposits has been increased by 20bp and 30bp to 5.7% and 5.8% from 5.5% respectively. Similarly, the rate of interest on the Senior Citizen Savings Scheme (SCSS) has been increased by 20bp from 7.4% to 7.6% for the third quarter of FY 2022-23 compared to the rate of interest notified for the second quarter of the same fiscal.
Further, the rate of interest on the popular Monthly Income Account Scheme (MIS) and the flagship Kisan Vikas Patra (KVP) have been revised upward by 10 basis points from 6.6% to 6.7% and from 6.9% to 7.0% respective for the third quarter (Q3) of the year 2022-23.
The government has notified the interest rates on the Small Savings Scheme for the 3rd quarter of FY 2022-23 on 29.09.2022.
After a long period of nine quarters in a row, the government has changed the interest rate on various small savings schemes. However, for the most popular PPF scheme, it is the straightforward tenth quarter for which the rate of interest has been kept unchanged by the government.
Other than a few aforesaid schemes, these rates have been kept unchanged and the status quo is maintained for the third quarter. The savings deposit will continue to earn the same rate of interest of 4 per cent.
This was notified by the Department of Economic Affairs under the Ministry of Finance in a Circular dated September 29, 2022.
The interest rate on small savings schemes including PPF is revised on a quarterly basis.
W.e.f. 13.08.2022, for a Term Deposit of 5 years - 10 years term, the State Bank of India is offering an interest rate of 5.65 per cent which is increased by 80 basis points to 6.45 per cent for senior citizen deposit holders. (Source: www.sbi.co.in)
Compared to it, the PPF interest rate stood at 7.1 per cent whereas the 5-year Term Deposit was offering an interest rate of 6.7 per cent. The lowest interest rate it offers for a Term Deposit is 5.5 per cent for 1-year tenure.
The interest rate on the National Savings Certificates has been kept unchanged at 6.8 per cent.
The Kisan Vikas Patra will earn interest of 7% (revised upwards from 6.9 per cent and it will take 123 months to double the principal amount of investment reduced from 124 months previously.
The Sukanya Samriddhi Account Scheme will continue to fetch a higher rate of interest of 7.6 per cent compared to other small savings schemes in the general category.
The flagship scheme for senior citizens namely, Senior Citizen Savings Scheme will fetch an increased rate of interest of 7.6 per cent (up from 7.4 per cent). In this scheme, interest is paid quarterly.
The interest rate on 5-year Recurring Deposit Rate shall continue to earn the same interest rate of 5.8 per cent.
For a 5-year time-deposit, the interest rate is 6.7 per cent. For 1-year, 2-years and 3-year time deposits, the rate of interest is 5.5 per cent, 5.7 per cent and 5.8 per cent. A similar time deposit of a 5-year Recurring Deposit will earn an interest rate of 5.8 per cent.
For a conservative investor, PPF and other small savings schemes like Sukanya Samriddhi Account and Senior Citizen Savings Scheme offer good returns. These products offer guaranteed, safe, and risk-free returns.
The 5-year Post Office Monthly Income Scheme (MIS), where interest is paid out monthly, offers 6.7 per cent.
Small savings rates are revised every quarter and if there is no change in the rates, the finance ministry retains the existing rates.
Comparative Small Savings Scheme Interest Rates for Q2 and Q3 of 2022-23
Recently, the government introduced a new PPF Scheme, 2019 to replace all the previous PPF rules.
Under the new scheme, contributions into a PPF in a year can be deposited without any restriction. Earlier, there was a limit of a maximum of 12 contributions in a year. The maximum amount that can be deposited in a year is capped at Rs. 1,50,000 whereas the minimum amount of contribution is Rs. 500. Any deposit can be made in multiples of Rs. 50, instead of Rs. 5 under the rule of 1968.
Further, a discontinued (dormant) account will also earn the same rate of interest as an active account earns. But a penalty of 1 per cent of the interest rate will be applicable for premature closure of the account. An account can be closed prematurely only after 5 years and under specified circumstances.
Interest on loan taken against the PPF account is reduced by 100 basis points to 1 per cent from 2 per cent earlier.
Prior to 2016, the interest rates were announced once which was applicable for the full year. Interest rates were revised every year. From FY 2016-17, it was decided by the government that the interest rate on small savings schemes will be notified on a quarterly basis.
Similarly, Sukanya Samriddhi Account Scheme, 2019, Senior Citizens Savings Scheme, 2019, Kisan Vikas Patra Scheme, 2019 were introduced replacing the earlier respective rules.
Read the full text of the circular:
F.No.1/4/2019-NS
Government of India
Ministry of Finance
Department of Economic Affairs
(Budget Division)
North Block, New Delhi
Dated: 30.06.2021
Office Memorandum
Subject: Revision of interest rates for Small Savings Schemes-reg.
The rate of interest on various Small Savings Schemes for the third quarter of financial year 2022-23 starting from 1st October, 2022 and ending on 31st December, 2022 have been revised as detailed below:
2. This has the approval of the competent authority.
(Rajesh Panwar)
Under Secretary to Govt. of India
Tele:011-2309 5155
Download Circular dated 29.09.2022 notifying interest rate for small savings scheme for Quarter 3 of FY 2022-23
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