The government has not made any change in the interest rates of small savings schemes for the January-March quarter for the fourth consecutive quarter. On Tuesday (31 December), the Finance Ministry has issued a notification informing about this. Earlier, there was no change in the interest rates in the April-June (Q1FY25), July-September (Q2FY25) and October-December (July-September) quarters. That is, for the Q4FY25 quarter, the interest rates on all small savings schemes including Public Provident Fund (PPF), National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) will remain unchanged. Public Provident Fund is getting 7.1% interest rate Currently, Public Provident Fund (PPF) gets 7.1% interest rate and Sukanya Samriddhi Yojana gets 8.2% interest rate. The government also keeps an eye on the country’s liquidity situation and inflation before taking a decision on the interest rates of small savings schemes. However, the government reviews interest rates on small savings schemes including PPF, NSC and KVP every three months. Interest rates on small savings schemes range from 4% to 8.2%. The government had increased interest rates in December 2023. Interest rates are reviewed every quarter The interest rates of small savings schemes are reviewed every quarter. The formula for fixing their interest rates was given by the Shyamala Gopinath Committee. The committee had suggested that the interest rates of these schemes should be 0.25-1.00% higher than the yield of government bonds of similar maturity. These schemes are the major source of household savings Small savings schemes are the major source of household savings in India and include 12 instruments. In these schemes, depositors get fixed interest on their money. The collections from all small savings schemes are deposited in the National Small Savings Fund (NSSF). Small savings schemes have emerged as a source of financing the government deficit. Classification Small saving instruments can be divided into three categories:
