The government revises small savings schemes interest rates every quarter. For the quarter April-June 2024, the government has kept the interest rates of post office schemes unchanged from the rates prevailing during the January March 2023 quarter.
“The rates of interest on various Small Savings Schemes for the first quarter of FY 2024-25 starting from 1’t April, 2024 and ending on 30th June, 2024 shall remain unchanged from those notified for the fourth quarter (1st January, 2024 to 31st March, 2024) of FY 2023-24,” stated an office memorandum issued by the Ministry of Finance on March 8, 2024.”
The Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Mahila Samman Savings Certificate, Senior Citizen Savings Scheme (SCSS) and National Savings Certificate (NSC) are some of the popular small savings schemes.
Also read: Post office term deposit (POTD) vs banks tax-saving fixed deposits (FDs): Which offers higher interest rate?
Small savings schemes interest rates
Here is a look at the interest rates on various small savings schemes for the first quarter of FY 2024-25 along with its compounding frequency.
Post office schemes interest rates for April-June 2024 quarter
Sl.No.InstrumentsRate of interest w.e.f 01.01.2024 to 31.03.2024Compounding Frequency1Post Office Savings Account4Annually21 Year Time Deposit6.9 (Annual Interest ₹708 for ₹10,000/-)Quarterly32 Year Time Deposit7.0 (Annual Interest ₹719 for ₹10,000/-)Quarterly43 Year Time Deposit7.1 (Annual Interest ₹719 for ₹10,000/-)Quarterly55 Year Time Deposit7.5 (Annual Interest ₹771 for ₹10,000/-)Quarterly65 Year Recurring Deposit Scheme6.7Quarterly7Senior Citizen Savings Scheme8.2 (Quarterly Interest ₹205 for ₹10,000/-)Quarterly and Paid8Monthly Income Account7.4 (Monthly Interest ₹62 for ₹10,000/-)Monthly and paid9National Savings Certificate (VIII Issue)7.7 (Maturity Value ₹14,490 for ₹10,000/-)Annually10Public Provident Fund Scheme7.1Annually11Kisan Vikas Patra7.5 (will mature in 115 months)Annually12Mahila Samman Savings Certificate7.5 (Maturity Value ₹11,602 for ₹10,000/-)Quarterly13Sukanya Samriddhi Account Scheme8.2Annually
Source: India Post website
How the interest rates small savings schemes are set
The government evaluates the interest rates of small savings plans periodically. The mechanism for calculating these prices was proposed by the Shyamala Gopinath Committee. According to the committee’s recommendations, interest rates for various schemes should be 25 to 100 basis points higher than the yields on government bonds with the same maturities.
Also read: What is the SCSS interest rate for the April- June 2024 quarter?
Last time interest rates were hiked
The government raised the interest rates on a few post office small savings plans for the quarter ending December 31, 2023. All schemes have kept their interest rates, with the exception of the recurring deposit rate. The Public Provident Fund (PPF) interest rate remained constant at 7.1%.
Tax benefits of small savings schemes
Not all the small savings schemes come with tax benefits. As per Section 80C of the Income-tax Act of 1961, these post office schemes are included NSC, SCSS, SSY, and PPF.
Also read: 5 post office savings schemes that do not offer tax saving benefit under section 80C
The schemes that do not come with section 80C benefit are:
Kisan Vikas Patra (KVP)Post Office Time deposits (except 5-year tenure)Post Office Monthly Income SchemeMahila Samaan Savings SchemePost Office Recurring Deposits.
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