In a recent announcement dated 28th June 2024, the Ministry of Finance, Department of Economic Affairs, Budget Division, issued an office memorandum under F.No.1/4/2019-NS concerning the interest rates for Small Savings Schemes for the second quarter of FY 2024-25. The memorandum, approved by the competent authority, confirms that the interest rates will remain unchanged for the period from 1st July 2024 to 30th September 2024.
Detailed Analysis
Small Savings Schemes have been a crucial part of the Indian financial ecosystem, providing safe investment options with relatively stable returns. These schemes include instruments such as the Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), and Sukanya Samriddhi Yojana (SSY), among others.
Interest Rates Overview
For the first quarter of FY 2024-25 (1st April 2024 to 30th June 2024), the interest rates for various Small Savings Schemes were set by the Ministry of Finance. The recent memorandum confirms that these rates will continue for the second quarter, ensuring consistency and stability for investors. The unchanged rates of interest on various Small Savings Schemes for the First and Second quarter of FY 2024-25 are as follows: –
Instrument | Rates of interest from 01.04.2024 to 30.06.2024 | Rates of interest from 01.07.2024 to 30.09.2024 |
Savings Deposit | 4.0 | 4.0 |
1 Year Time Deposit | 6.9 | 6.9 |
2 Year Time Deposit | 7.0 | 7.0 |
3 Year Time Deposit | 7.0 | 7.1 |
5 Year Time Deposit | 7.5 | 7.5 |
5 Year Recurring Deposit | .6.7 | 6.7 |
Senior Citizen Savings Scheme | 8.2 | 8.2 |
Monthly Income Account Scheme | 7.4 | 7.4 |
National Savings Certificate | 7.7 | 7.7 |
Public Provident Fund Scheme | 7.1 | 7.1 |
Kisan Vikas Patra | 7.5 (will mature in 115 months) | 7.5 (will mature in 115 months) |
Sukanya Samriddhi Account Scheme |
8.0 | 8.2 |
Implications for Investors
The decision to maintain the interest rates can be seen as a measure to provide stability in the financial market amid global economic uncertainties. Investors in Small Savings Schemes can continue to benefit from predictable returns without the concern of rate fluctuations. This consistency is particularly beneficial for risk-averse individuals and those relying on these schemes for long-term financial planning, such as retirees and parents saving for their children’s education.
Conclusion
The Ministry of Finance’s decision to keep the interest rates for Small Savings Schemes unchanged for the second quarter of FY 2024-25 is a significant step in maintaining financial stability and investor confidence. By providing a steady and predictable rate of return, these schemes continue to be an attractive option for Indian savers looking for secure and stable investment avenues. As economic conditions evolve, the government’s approach to Small Savings Schemes will play a crucial role in shaping the financial landscape for millions of investors across the country.
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F.No.1/4/2019-NS
Government of India
Ministry of Finance
Department of Economic Affairs
(Budget Division)
North Block, New Delhi
Dated: 28.06.2024
OFFICE MEMORANDUM
Subject: Revision of Interest Rates for Small Savings Schemes – req.
The rates of interest on various Small Savings Schemes for the second quarter of FY 2024-25 starting from 1st July, 2024 and ending on 30th September, 2024 shall remain unchanged from those notified for the first quarter (1st April, 2024 to 30th June, 2024) of FY 2024-25.
2. This has the approval of the competent authority.
(Kapil Patidar)
Deputy Secretary (Budget)
Tele — 01123092649
To,
1. The Finance Secretary & Secretary
Expenditure, Department of
Expenditure North Block, New Delhi.
2. The Secretary,
Department of Economic Affairs
North Block, New Delhi.
3. The Secretary,
Department of Revenue
North Block, New Delhi.
4. The Secretary,
Department of Financial Services
Jeevan Deep Building, New
Delhi.
5. The Secretary,
Department of Posts
Dak Bhawan, New Delhi.
6. The Chief General Manager
(DGBA)
Reserve Bank of India, Central
Office, Mumbai.
7. Reserve Bank of India
Central Account Section, Additional
Office Building, East High Court Road,
Civil Lines, P.B. No.15, Nagpur — 440 001.
8. Chief Secretaries of States / UT Government
9. The Joint Director
National Savings Institute, New
Delhi.