The Centre on Friday marginally increased the interest rate on the five-year recurring deposit scheme to 6.7 per cent from 6.5 per cent for the December quarter and retained the rates for all other small savings schemes.

According to a finance ministry circular, the interest rate on savings deposits has been retained at 4 per cent and on the one-year term deposit at 6.9 per cent.

The interest rate on both the two-year and three-year term deposits is 7 per cent while on the five-year term deposit, the rate is 7.5 per cent.

Senior citizen’s savings scheme will fetch an interest rate of 8.2 per cent.

Analysts said the alignment of Senior Citizen Savings Schemes and PPF rates with long-term fixed deposits (FDs) combined with the Reserve Bank of India’s (RBI) decision to pause rate hikes had left limited room for further upward adjustments.

On the monthly income account scheme, the interest rate is 7.4 per cent while it is 7.7 per cent on the National Savings Certificate and 7.1 per cent on the Public Provident Fund (PPF) scheme.

The Centre has not changed the interest rate on the extremely popular Public Provident Fund since the April-June 2020 quarter when it was reduced to 7.1 per cent from 7.9 per cent.

Most investors have been hoping that the rate for this instrument would be hiked again.

The interest rate on the Kisan Vikas Patra is 7.5 per cent and the investments will mature in 115 months.

According to the circular, the interest rate on the popular girl child scheme the Sukanya Samriddhi Account has been retained at interest rate of 8 per cent.

The government notifies the interest rate on small savings schemes, majorly operated by post offices, every quarter.