The central government operates a number of small savings schemes. PPF, Sukanya Samriddhi Yojana, and National Savings Certificate are a few examples. These schemes’ interest rates are set on a quarterly basis. The government raised interest in some of these programs from January to March. The Public Provident Fund (PPF) and Girl Savings Plan (Sukanya Samriddhi Yojana) interest rates, however, remained unchanged at that time. Tell them that the interest rate on these plans has not increased since January 2019. A government official reportedly stated that there is no chance of receiving significant returns from these schemes.
This is because the Shyamala Gopinath Committee formula,
which was approved in April 2016, is no longer completely supported by the government. The returns of these two schemes remained unchanged despite the rate increase on certain other modest savings plans for the third and fourth quarters of 2022–2023. According to a top Finance Ministry official, we now disagree with the Shyamala Gopinath committee’s recommendations.
What advice is given on small savings schemes?
For the March quarter, the government raised the interest rate on various programs. The government increased it from 20 bps to 110 bps. Despite this, PPF and Sukanya Samriddhi Yojana’s interest levels did not rise. According to the formula established by the panel led by the former deputy governor of the Reserve Bank of India (RBI), Shyamal Gopinath, the PPF rate for the December quarter should have been increased to 7.72% and Sukanya Samriddhi account to 8.22%.
Every three months, interest rates are reviewed.
Every three months, the Small Savings Scheme’s interest rates are adjusted. The 2016 Shyamala Gopinath Committee provided the mechanism for determining the interest rates for various schemes. The committee recommended that these schemes’ interest rates be 0.25 to 1.00% greater than the yield of government bonds with a comparable maturity. Government bond yields are currently hovering around 7.5%. The Small Savings Scheme’s interest rates were not raised in spite of this.
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