After a long time, the government has increased the interest rates on small savings schemes. This will benefit small savers and investors substantially.
Good news for investors, particularly those who bank on small savings schemes such as NSC, MIS and PPF for day-to-day living or retirement income. For, after a long time, the government has increased the interest rates on such schemes. In fact, the interest rates of small savings schemes such as PPF, NSC, SSAS, KVP and TD, among others, have been increased by 0.3% to 0.4% in respect of quarter 3 of the Financial Year 2018-19 (i.e. October 1, 2018 to December 31, 2018), compared to those of the quarter 1 and quarter 2 of the Financial Year 2018-19.
“It’s for the first time that the government has announced upward changes in the interest rates of small saving schemes, since the quarterly review system of interest rates has been implemented in the Q1 of FY 2016-17. Hopefully, the increased interest rates will be beneficial for the retired pensioners, old age persons, etc., those who are mainly dependent on the interest income from investments in small saving schemes,” ICAI said in its income tax update.
Earlier, the government had notified that there would be no change in the interest rates of various small savings schemes for the period April 1, 2018 to June 30, 2018 and July 1, 2018 to September 30, 2018 (i.e. applicable during the Q1/ Q2 of FY 2018-19), as compared to the Q4 of FY 2017-18.
Here is the summarised table of the revised rates of interest on various small savings schemes for FY 2018-19:
Interest Rates (Q1/ Q2 of 2018-19)
Interest Rates (Q3 of 2018-19)
Savings Deposit (SD)
1 Year Time Deposit (TD)
2 Year Time Deposit (TD)
3 Year Time Deposit (TD)
5 Year Time Deposit (TD)
5 Year Recurring Deposit (RD)
5 Year Senior Citizens Savings Scheme (SCSS)
Quarterly and Paid
5 year Monthly Income Scheme (MIS)
Monthly and Paid
5 Year National Savings Certificate (NSC)
Public Provident Fund (PPF) Scheme
Kisan Vikas Patra (KVP)
Sukanya Samriddhi Account Scheme (SSAS)
* will mature in 118 months | ** will mature in 112 months