The government announced the interest rates applicable to small savings schemes for the quarter April-June 2024. The government said that it has decided to keep the rates unchanged. “The rates of interest on various Small Savings Schemes for the first quarter of FY 2024-25 starting from 1’t April, 2024 and ending on 30th June, 2024 shall remain unchanged from those notified for the fourth quarter (1st January, 2024 to 31st March, 2024) ofFY 2023-24,” stated an office memorandum issued by the Ministry of Finance on March 8, 2024
This means that for the April-June 2024 quarter the Public Provident Fund (PPF) will continue to earn 7.1% interest rate
Also read: Was Public Provident Fund rate hiked for April-June 2024 quarter?
Here is a look at the interest rates on various small savings schemes for the first quarter of FY 2024-25.
| Post office schemes interest rates forApr-June 2024 | |
| Instrument | Rates of interest from April-June 2024 (%) |
| Savings Deposit | 4 |
| 1 Year Time Deposit | 6.9 |
| 2 Year Time Deposit | 7 |
| 3 Year Time Deposit | 7.1 |
| 5 Year Time Deposit | 7.5 |
| 5 Year Recurring Deposit | 6.7 |
| Senior Citizen Savings Scheme | 8.2 |
| Monthly Income Account Scheme | 7.4 |
| National Savings Certificate | 7.7 |
| Public Provident Fund Scheme | 7.1 |
| Kisan Vikas Patna | 7.5 (will mature in 115 months) |
| Sukanya Samriddhi Account | 8.2 |
Source: Ministry of Finance
How the interest rates small savings schemes are set
The government routinely assesses the interest rates of small savings schemes on a quarterly basis. The methodology for determining these rates was proposed by the Shyamala Gopinath Committee. According to the committee’s recommendations, the interest rates for various schemes should range from 25 to 100 basis points above the yields of government bonds with corresponding maturities.
Last time interest rates were hiked
The interest rates of certain small savings schemes or post office schemes for the quarter ending December 31, 2023 were increased by the government. The interest rates of all schemes expect the recurring deposit rate have been kept unchanged. The interest rate on the Public Provident Fund (PPF) was kept unchanged at 7.1 per cent.
Since May 2022, the Reserve Bank of India (RBI) has implemented a series of key rate hikes. Consequently, banks have responded by elevating interest rates on fixed deposits (FD), offering a positive turn of events for FD investors who have experienced a prolonged period of historically low interest rates. However, in the most recent four policy meetings, the RBI has chosen to maintain a status quo by refraining from further adjustments to the key rates.
