According to the Reserve Bank of India (RBI), the rate rises on some small savings plans for this quarter may make it harder for banks to raise deposits and may even force them to boost rates.
The government increased interest rates on eight out of 12 small savings instruments for the quarter beginning in January 2023. This includes a minimal 20 basis point (bps) increase for the National Savings Certificate and Kisan Vikas Patra and a 110 bps increase for one-, two-, and three-year time deposits. Basis points (bp) have a value of 0.01%.
Public Provident Fund (PPF) and Sukanya Samriddhi Account scheme returns remained constant at 7.1% and 7.6%, which have been in effect since April 2020. Small savings schemes have quarterly interest rate fixes with a spread of 0-100 basis points (bps) over and above the yields on equivalent maturity government securities.
This news was written by Ms. Pujari Dharani, Research Assistant, All India Legal Forum.
ALL INDIA LEGAL FORUM 