Savings interest rate hiked; 2-year deposits to get 7%

However, interest rates on term deposits for three years and five years have been retained at 7% and 7.5%.

The government on Friday raised interest rates on select saving schemes by up to 0.3 per cent for the July-September quarter in line with the high-interest rates in the banking system. With the revision, a one-year term deposit with post offices will now earn 0.1 percentage higher point at 6.9 per cent and for the two years tenor -- 7 per cent (up from 6.9 per cent).

The highest increase of 0.3 per cent was for the five-year recurring deposit (RD). During the second quarter of the current fiscal, RD holders would get 6.5 per cent against the existing 6.2 per cent, as per the finance ministry notification.

However, interest rates on term deposits for three years and five years have been retained at 7 per cent and 7.5 per cent.

The interest rates for popular PPF and savings deposits are retained at 7.1 per cent and 4 per cent, respectively.

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The interest rate on the National Savings Certificate (NSC) remained unchanged at 7.7 per cent for July 1 to September 30, 2023, period.

The new rate for the girl child savings scheme Sukanya Samriddhi too stood at the existing level of 8 per cent.

The interest rate on the senior citizen savings scheme and Kisan Vikas Patra (KVP) is 8.2 per cent and 7.5 per cent, respectively.

Interest rates were increased in the last (January-March) quarter as well as the April-June quarter.

Interest rates for small savings schemes are notified on a quarterly basis.

There is no increase in interest rate for Monthly Income Scheme, and this will earn 7.4 per cent for the investors.

The Reserve Bank since May has raised the benchmark lending rate by 2.5 per cent to 6.5 per cent, prompting banks to raise interest rates on deposits as well.

The RBI has maintained the status quo on policy rate in the last two consecutive Monetary Policy Committee meetings.