Increased Interest Rates on Post Office Schemes, Drive Investor Interest and Provide Higher Returns on Fixed Deposits


The central government has recently announced an increase in the interest rates for the July-September quarter for popular investment schemes, including the Laghu Sampadya Schemes. This move aims to attract more investors and provide higher returns on fixed deposits. The interest rates for post office savings schemes now range from 4 percent to 8.20 percent, offering a competitive alternative for individuals looking to grow their savings. The revised rates will be effective from July 1st and are expected to drive increased interest in these schemes.

Changes in Interest Rates:

The revised interest rates reflect an increase of 10 basis points (0.10%) each for fixed deposits with a tenure of one year and three years. Additionally, recurring deposits with a five-year tenure have seen a rate hike of 30 basis points (0.30%). However, the interest rates for other small savings schemes remain unchanged from the previous quarter.

Impact on Fixed Deposits:

The increased interest rates on fixed deposits have garnered significant attention from investors. With the new rates in effect, a one-year fixed deposit will yield an interest rate of 6.90 percent, while a three-year fixed deposit will earn 7 percent. For those opting for a five-year recurring deposit, an interest rate of 6.50 percent can be expected. These attractive rates provide individuals with an opportunity to grow their savings and achieve their financial goals.

Post Office Savings Schemes:

Post Office Savings Accounts now offer a 4 percent interest rate, while a two-year time deposit earns 7 percent interest, and a five-year time deposit yields 7.50 percent interest. Among the various small savings schemes, the Senior Citizen Savings Scheme stands out with an interest rate of 8.20 percent. Other notable interest rates include 7.40 percent for the Monthly Income Scheme, 7.70 percent for the National Savings Scheme, 7.10 percent for the Public Provident Fund, 7.50 percent for the Kisan Vikas Patra, and 8 percent for the Sukanya Samriddhi Yojana.

Factors Influencing Interest Rates:

The interest rates of small savings schemes are closely linked to government securities with similar maturities. The rates fluctuate based on the movement of government securities’ market yields during the reference period. The government employs a formula to calculate interest rates, which aligns them with the direction of the market yield changes.

Market Trends and Government Bonds:

During the reference period for the July-September interest rates, government bond yields experienced a significant decline. The yields on five-year bonds dropped by approximately 50 basis points, while 10-year bonds saw a decrease of about 45 basis points. Furthermore, the yield on the 364-day Treasury bill fell by more than 30 basis points. These trends in the bond market contributed to the decision to increase interest rates on small savings schemes.


The recent increase in interest rates for post office schemes, including fixed deposits, has captured the attention of investors. The revised rates provide an attractive opportunity to earn higher returns on savings and investment. With a range of post office savings schemes offering competitive interest rates, individuals have a variety of options to choose from based on their financial goals and preferences. The government’s decision to align the interest rates with market trends ensures that investors can benefit from favorable returns while promoting a conducive savings environment. As a result, these revised interest rates are expected to drive increased investor interest and further strengthen the appeal of post office schemes as a reliable and lucrative investment avenue.

Related Articles

Leave a Reply

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker