Govt cuts interest rates of PPF, NSC, Senior Citizens Savings Scheme

FILE PHOTO: A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad, India, September 20, 2018. REUTERS/Amit Dave (REUTERS)

Finance Ministry on Wednesday has announced a cut in interest rates of small savings scheme. According to the circular by ministry, the rates of small savings schemes have been reduced by 50-100 basis points. Interest rates for small savings schemes are reviewed and notified by the finance ministry on a quarterly basis.

From 1 April, Public Provident Fund (PPF) will fetch interest rate of 6.4%. The National Savings Certificate (NSC) will witness an interest rate of 5.9%. Among the small savings scheme, the girl child savings scheme Sukanya Samriddhi Yojana will continue to fetch the interest rate. It will continue to offer 6.9%.

Similarly, the interest rate for the five-year Senior Citizens Savings Scheme has been retained at 6.5%. The interest on the senior citizens’ scheme is paid quarterly. The interest rate on Kisan Vikas Patra (KVP) has been retained at 6.2%.

Interest rate on post office savings deposits has been retained at 3.5%. On the other hand, term deposits of one-five years will fetch interest rate in the range of 4.4-5.8%, to be paid quarterly, while the interest rate on five-year recurring deposit is pegged at 5.8%.

The government continues to rely on small savings for financing its fiscal deficit, say economists. “For FY22 again financing from small savings is pegged at a significant 3.9 lakh crore or 26% of the fiscal deficit,” SBI economists had earlier said in a note.

For the April-June quarter of last year, the government had cut interest rates on small savings schemes by up to 140 basis points and since then they have remained steady.

This article is auto-generated by Algorithm Source: www.livemint.com

Report

What do you think?

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings