(PPF & NSC to give 8%, Senior citizen to get 8.7%)
The Ministry of Finance Government of India has announced the Rates of Interest on various Small Savings Schemes for the Third Quarter of the Current Financial Year 2018-19 starting 1st October, 2018, and ending on 31st December, 2018. The Small Savings Schemes includes include Senior Citizen Saving Scheme , Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), and post office time deposits etc. It is widely believed that it is a move that will prompt banks to offer higher deposit rates.
The Rates of Interest on the basis of the interest compounding/payment built-in in the Schemes shall be as under:
| Scheme | Rate of Interest
from October 1, 2018 to December 31,2018 |
Interest rate for the previous quarter
July 1, 2018 to September 30, 2018 |
Interest compounded
On |
| Savings account | 4% | 4% | Annual rest |
| 1 year time deposit | 6.90% | 6.60% | Quarterly rest |
| 2 year time deposit | 7.00% | 6.70% | Quarterly rest |
| 3 year time deposit | 7.20% | 6.90% | Quarterly rest |
| 5 year time deposit | 7.80% | 7.40% | Quarterly rest |
| 5 year Recurring Deposit | 7.30% | 6.90% | Quarterly rest |
| 5 year Senior Citizen Saving Scheme | 8.70% | 8.30% | Interest paid quarterly, Quarterly rest |
| 5 year Monthly Income Account Scheme | 7.70% | 7.30% | Interest paid monthly, |
| 5 year NSC | 8.00 % | 7.60% | Annual rest |
| PPF (Public Provident Fund) | 8.00% | 7.60% | Annual rest |
| KVP (Kissan Vikas Patra) | 7.70 %(matures 112months) | 7.30% (matures 118 months) | Annual rest |
| Sukanya Samriddhi Account Scheme | 8.50% | 8.10% | Annual rest |
The government had announced in February 2016 that small savings rates will be set quarterly instead of earlier system of announcing for every year so as to align them with the market rate of government securities.
