NEW DELHI: The government on Friday announced a minor adjustment in interest rates on three-year postal deposits Sukanya Samriddhi programwhile prices remain low for everyone else savings Products unchanged.
The Sukanya Samriddhi program that focuses on the Girl, will reach 8.2% in the January-March quarter, up from 8%. The interest rates for three-year fixed deposits at post offices were increased by 10 basis points to 7.1% (100 basis points = percentage points).
The government has kept public provident fund interest rates unchanged for over three years.
The Finance Ministry's decision will be good news for banks that compete with small savings banks.
The latest revision also comes at a time when several major banks, including state-owned ones Bank of India and Bank of Baroda have increased interest rates for certain tenures. However, the government has argued that it will now take into account the tax benefits offered on schemes like PPF and Sukanya Samriddhi while determining returns. Typically, there is a rush for funds in the fourth quarter of the fiscal year, causing banks to raise interest rates.
Although the government does not specify the reason for its decision, officials have claimed that there has been a steady flow of funds due to an increase in the investment cap, particularly under programs tailored to senior citizens.
In addition, the government has introduced a new women-focused program that will result in an additional flow of resources.
The Sukanya Samriddhi program that focuses on the Girl, will reach 8.2% in the January-March quarter, up from 8%. The interest rates for three-year fixed deposits at post offices were increased by 10 basis points to 7.1% (100 basis points = percentage points).
The government has kept public provident fund interest rates unchanged for over three years.
The Finance Ministry's decision will be good news for banks that compete with small savings banks.
The latest revision also comes at a time when several major banks, including state-owned ones Bank of India and Bank of Baroda have increased interest rates for certain tenures. However, the government has argued that it will now take into account the tax benefits offered on schemes like PPF and Sukanya Samriddhi while determining returns. Typically, there is a rush for funds in the fourth quarter of the fiscal year, causing banks to raise interest rates.
Although the government does not specify the reason for its decision, officials have claimed that there has been a steady flow of funds due to an increase in the investment cap, particularly under programs tailored to senior citizens.
In addition, the government has introduced a new women-focused program that will result in an additional flow of resources.
