The Narendra Modi government has announced a 20 basis points increase in the interest rates for the ‘Sukanya Samriddhi Yojana.’ According to a finance ministry circular, the interest rate for deposits under this scheme has been raised from 8% to 8.2%. The ‘Sukanya Samriddhi Yojana’ is a savings scheme designed for the welfare of the girl child as part of the ‘Beti Bachao – Beti Padhao’ initiative.
Parents or guardians of a girl child aged 10 or younger can open an account in authorized banks or the nearest post offices. The scheme offers not only a higher interest rate but also several tax benefits. The account matures after 21 years or in the event of the girl child’s marriage after she turns 18. However, depositors can withdraw up to 50% of the investment prematurely after the girl turns 18, even if she doesn’t marry.
In addition to the Sukanya Samriddhi Yojana, the government has also revised the interest rates for other savings schemes. The interest rate for three-year term deposits has been increased from 7% to 7.1%. The Public Provident Fund interest rate remains unchanged at 7.1%, while the interest rate on savings deposits remains at 4%. The Kisan Vikas Patra interest rate is now 7.5%, and the National Savings Certificate (NSC) maintains an interest rate of 7.7% for the January 1 to March 31, 2024, period.
The government reviews and notifies the interest rates on small savings schemes, primarily operated by post offices, every quarter in the financial year. The Reserve Bank has increased the benchmark lending rate by 2.5% since May 2022, leading to banks raising interest rates on deposits.
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