Context
Recently Ministry of Finance released a notification indicating that the rate of interest on various small saving schemes for the first quarter of the FY2022-23 shall remain unchanged from the current rates that existed in the fourth quarter of FY2021-22.
News Highlights
- As per the release, the interest rate on the Public provident fund(PPF) and National Saving Certificate(NSC) will continue at 7.1 percent and 6.8 percent respectively.
- The interest rate on the one-year term deposit scheme will continue at 5.5 percent in Q1FY23 and the girl child saving scheme, Sukanya Smridhi Yojna will earn 7.6 percent rate of interest.
Small saving schemes
- These are the centrally managed saving instruments brought with an aim to encourage citizens to save irrespective of their age.
- They enjoy high credibility and popularity among citizens as they provide a generally higher return than bank fixed deposits and also a sovereign guarantee and tax benefits.
- They can be grouped under three heads that is
- Saving certificates such as National saving certificate,Kisan Vikas Patra
- Social security schemes such as PPF, Sukanya Smridhi account Senior citizens saving scheme, etc.
- The deposits collected from these SSS are pooled in the national small saving fund that is used by the central government to finance its fiscal deficit.
- The ministry of finance has been reviewing the interest rate on the different small saving schemes since 2016.
