With this, the rates will remain unchanged for an eighth straight quarter, despite the central bank’s reduction in the benchmark lending rate by 125 basis points in the past one year.
During the current easing cycle, the Monetary Policy Committee trimmed the repo rate by 25 basis points each in February and April, 50 basis points in June and 25 basis points in December to 5.25%.
The rate changes for small savings schemes are usually determined, factoring in expected yields of government securities of comparable tenures, which, too, have started moderating in recent quarters.
According to a notification by the Department of Economic Affairs, deposits under the PPF and Sukanya Samriddhi accounts will continue to offer interests of 7.1% and 8.2%, respectively, for the March quarter.
The rates will also remain unchanged for Senior Citizen Savings Scheme (8.2%), National Savings Certificate (7.7%), Kisan Vikas Patra (7.5% for maturity in 115 months), savings deposits (4%), one-year deposits (6.9%), two-year deposits (7%), three-year deposits (7.1%), five-year deposits (7.5%), five-year recurring deposits (6.7%) and monthly income account scheme (7.4%).
Collections under the small savings schemes are used by the government to part-finance the central government’s fiscal deficit. The government aims to draw Rs 3.43 lakh crore from the National Small Savings Fund in FY26, lower than Rs 4.12 lakh crore (revised estimate) a year before. The Centre aims to reduce its fiscal deficit to 4.4% of gross domestic product in FY26 from 4.8% a year earlier.