Ministry of Finance has announced the interest rates for small saving schemes for the period October to December 2018 (3rd Quarter of FY 2018-2019). As expected, this time, the government has increased the interest rates for post office small saving schemes. The interest rates for some of the schemes are increased by 0.4%. Let us take a look at the changes in interest rates applicable from October 1, 2018.
Some of the small saving schemes like NSC, PPF, RD Account, Sukanya Samriddhi Account, KVP, SCSS and Post Office Time Deposit are very popular among the people. The interest rates on small saving schemes have a fixed locking period except for post office savings account.
Quarterly Timetable for change in Interest Rates
The government announces interest rates for small saving schemes on a quarter basis since April 1, 2016. The table below shows the quarterly timetable for change in interest rates.
|
S. No. |
Quarter for which interest rates would be effective |
Date on which it will be notified |
|
1 |
1st Quarter (April – June) |
15th March |
|
2 |
2nd Quarter (July – September) |
15th June |
|
3 |
3rd Quarter (October – December) |
15th September |
|
4 |
4th Quarter (December – March) |
15th December |
As per the above timetable, the interest rates for small saving schemes are notified for the 3rd quarter of the financial year 2018-19 starting October 1, 2018, and ending on December 31, 2018.
Latest Interest Rates (October 1, 2018, to December 31, 2018)
Below is the latest interest rates for post office schemes (Oct-Dec 2018).
|
Scheme Name |
The rate of Interest from 01/10/2018 to 31/12/2018 |
The rate of Interest from 01/07/2018 to 30/09/2018 |
|
Post Office Savings Account |
4% |
4% |
|
1 Year Time Deposit |
6.90% |
6.60% |
|
2 Years Time Deposit |
7.00% |
6.70% |
|
3 Years Time Deposit |
7.20% |
6.90% |
|
5 Years Time Deposit |
7.80% |
7.40% |
|
5 Years Recurring Deposit (RD) |
7.30% |
6.90% |
|
5 Years Monthly Income Account |
7.70% |
7.30% |
|
Kisan Vikas Patra (KVP) |
7.70% |
7.30% |
|
5 Years National Savings Certificate (NSC) |
8.00% |
7.60% |
|
Public Provident Fund (PPF) |
8.00% |
7.60% |
|
Sukanya Samriddhi Account |
8.50% |
8.10% |
|
Senior Citizens Savings Scheme (SCSS) |
8.70% |
8.30% |
Latest Interest Rates for Small Saving Schemes
The interest rates on various post office small saving schemes for the 3rd quarter of the financial year 2018-19 are given below.
1. Highest interest rates are offered on Senior Citizens Saving Scheme (SCSS) – 8.7% per annum (Quarterly compounding and paid).
2. The interest rate for Sukanya Samriddhi Account has been increased from 8.1% to 8.5% p.a. (Annually compounding).
3. National Savings Certificate (NSC) – 8% p.a. (Annually compounding).
4. Public Provident Fund (PPF) will now offer 8% per annum (Compounding frequency is annual).
5. Kisan Vikas Patra (KVP) – 7.7% per annum (Compounded annually and now investment in KVP would be doubled in 112 months).
6. Post Office Monthly Income Account – 7.7% p.a. (Monthly compounding and paid).
7. Five-year Recurring Deposit – 7.3% (Quarterly compounding).
8. Time Deposits of 1-5 years tenure offers 6.9% to 7.8% per annum : (Compounding frequency is quarterly for all Time Deposits).
Interest rate for Time Deposit of 5 Years – 7.8% per annum
For Time Deposit of 3 Years – 7.2% per annum
Time Deposit of 2 Years – 7% per annum
Time Deposit of 1 Year – 6.9% per annum
9. Interest rates for Post Office Savings Account has been kept at 4% per annum (Compounding frequency is annual).
You can read the detailed notification issued by Ministry of Finance here
Applicability of Revised Interest Rates
The revised interest rates for small saving schemes would apply only to the new accounts opened except post office savings account, PPF, and Sukanya Samriddhi Account. The contracted interest rates for post office time deposit, SCSS, RD Account, NSC, Post Office Monthly Income Account, and KVS are locked-in so the interest offered on the date of investment will remain unchanged for the entire tenure of the investment.
The finance ministry has increased the interest rates for small saving schemes. The interest rates for some of the schemes are increased by 0.4%. These small saving schemes will remain a good investment option for low-risk appetite investors.
Related Post: Interest Rates for Small Saving Schemes July to September 2018
Related Post: Post Office Monthly Income Account