Govt keeps interest rate of small savings schemes unchanged for Q1FY23

Rising inflation rate and increasing chances of the RBI reversing its accommodative policy stance may have prevented the govt from cutting small savings rates

In relief to the middle class and small savers, the finance ministry on Thursday left interest rates on government backed saving instruments unchanged for the first quarter (April-June) of FY23. The decision came days after the interest rate on employees' provident fund organisation (EPFO) deposits was cut to a four-decade low of 8.1 per cent for FY22 from 8.5 per cent in the previous year.

Rising inflation rate and increasing chances of the Reserve Bank of India reversing its accommodative policy stance, which may lead to increase in interest rates, may have prevented the government from cutting small savings rates.