The government on Friday announced an increase of 20 basis points in interest rate of one small savings scheme — 5-year recurring deposit — for the October-December quarter and kept rates unchanged for other small savings instruments. This comes amid a pause in the interest rate cycle by the Reserve Bank of India (RBI) even though the yield of all government securities increased during the reference period of June-August for the October-December quarter, with the five-year benchmark government security (G-sec) bond rate rising by 24 basis points.
For October-December, interest rate for 5-year recurring deposit has been hiked to 6.7 per cent from 6.5 per cent, a hike of 20 basis points. The interest rates for the Public Provident Fund scheme, Senior Citizen Savings Scheme and National Savings Scheme Certificate remained unchanged. The interest rate for the Public Provident Scheme remained unchanged at 7.1 per cent for the 14th consecutive quarter. The interest rates for one-year and two-year time deposits remained steady at 6.9 per cent and 7.9 per cent, respectively.
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