[ad_1]
In all, the government has raised interest rates on 10 small savings schemes for April 1 to June 30, 2023 period.
For joint accounts, the limit under the NSS will be Rs 15 lakh instead of Rs 9 lakh at present. The finance ministry also notified the Mahila Samman Savings Certificate announced in the FY24 budget, with a deposit limit of Rs 2 lakh. The scheme will offer a fixed interest of 7.5 per cent for two years with a partial withdrawal option.
The government has increased interest rates for one, two, three, and five-year deposits. For one-year deposit, it was raised by 20 bps to 6.8 per cent. For the two-year, it has been made 6.9 per cent. For three-year deposit it is now 7 per cent, a hike of 10 bps.
Aditi Nayar, Chief Economist at ICRA, said, “As expected, small savings interest rates have been hiked by 10-70 bps across various instruments. This should help garner steady deposits in the coming quarter, in light of the expected rate hike from the MPC in April 2023, which would subsequently get transmitted to bank deposit rates.”
Effective interest rate on Sukanya Samriddhi Scheme now stands at 8 per cent, after a raise of 40 bps. Interest rate on Monthly Income Account Scheme has been raised to 7.4 per cent, Kisan Vikas Patra to 7.5 per cent.
After RBI raised concerns about limited transmission of its policy rate cuts, the Finance Ministry started quarterly reviews of small savings rates, beginning 1 April 2016, making the process more dynamic and market-linked.
“Every investor compares the return of small savings against the fixed deposits (FDs) offered by banks. The PPF has been kept unchanged likely due to the exemption from taxation,” he added.
Major public sector banks such as Punjab National Bank, Canara Bank, State Bank of India, and Bank of India and private commercial banks such as HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank also raised interest rates on their deposits post the RBI February hike in benchmark policy rates.
In a recent meeting, the finance ministry also asked PSBs to focus on high quality current account and savings account (CASA) acquisition and retention as against bulk deposits.
[ad_2]
Source link