Amid a low-interest environment and rising COVID Omicron cases, the government has decided not to reduce interest rates on small saving schemes or post office schemes for the last quarter of the financial year 2021-22.
The announcement from the Ministry of Finance issued via circular dated 31st December 2021 is seen as a new year gift by the Citizens from the Government of India.
Thus, PPF holders will continue to fetch interest of 7.1 percent per annum whereas, the Senior Citizen Savings Scheme will fetch 7.4 percent per annum. The Sukanya Samriddhi Account holders will continue to get 7.6 percent compounded on annual basis.
The 5-year Monthly Income Scheme (MIS) will continue to offer 6.6 percent interest payable monthly, while the 5-year National Saving Certificate Scheme will garner the interest of 6.8 percent compounded annually, payable at the end of 5 years. The 1-year term deposit with the post office will provide interest of 5.5 percent while a 5-year term deposit with the post office, will fetch interest of 6.7 percent per annum.
Given below is the summary of Interest rates on post office deposit schemes for the quarter ending 31st March 2022 –
|Instrument/ Scheme||Interest Rate for the period 01st January 2022 to 31st March 2022 (%)||Compounding Frequency|
(Saving Bank Account)
|1-year Term Deposit||5.5||Quarterly|
|2-year Term Deposit||5.5||quarterly|
|3-year Term Deposit||5.5||Quarterly|
|5-year Recurring Deposit (RD)||5.8||Quarterly|
|5-year Monthly Income Scheme (MIS)||6.6||Paid Monthly|
|5-year Term Deposit||6.7||Quarterly|
|5-year National Savings Certificate (NSC)||6.8||Annually|
|Kisan Vikas Patra (KVP)
|Public Provident Fund (PPF)||7.1||Annually|
|5-year Senior Citizen Savings Scheme (SCSS)||7.4||Paid Quarterly|
|Sukanya Samriddhi Yojana (SSY)||7.6||Annually|
Source: Circular issued by Ministry of Finance dated 31st December 2021
The government defines the interest rates on various post office schemes at the start of each quarter of the financial year.
It is worthwhile to note that even if the government changes the interest rates on these small saving schemes, the new rates will not apply to all investors of small saving schemes.
Investors should remember that any changes made in interest rates of KVP, NSC, Senior Citizen Saving Scheme(SCSS), or term deposits will not be applicable and the interest rate gets fixed at the time of investment in such schemes.
Considering, the interest rates offered by these Post office savings schemes, they are a lucrative option when compared to bank fixed deposits. Presently, most of the prominent banks are giving interest of approx. 5 to 5.5 percent on term deposits for the period of 1 to 10-years.