The Ministry of Finance on Friday reduced interest rates on small savings schemes by 0.1% for the July to September quarter. The small savings schemes include public provident funds, five-year term deposits, recurring deposits, national savings certificates and the Senior Citizens Savings Scheme.
The revised rates will remain effective from July 1 to September 30, said the Finance Ministry.
The move is reportedly aimed at matching the softening of interest rates in the banking sector since the Reserve Bank of India lowered the repo rate for the third time this year.
“On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis,” the Finance Ministry said in its statement.
Except the interest on savings deposits, which has been retained at 4% annually, rate on all other schemes has been cut by 0.1%.
The Public Provident Fund scheme and National Savings Certificate will fetch annual interest rate of 7.9% from the existing rate of 8%. The Kisan Vikas Patra will yield 7.6%, and mature in 113 months as against 112 months in the previous quarter.
The Sukanya Samriddhi account – the girl child savings scheme – will yield an interest rate of 8.4% from 8.5%. Term deposits of one to three years will fetch interest rate of 6.9%, to be paid quarterly, while the five-year deposit is pegged at 7.7% and for recurring deposits 7.2% from existing rate of 7.3%. Interest rate for the five-year Senior Citizens Savings Scheme will fetch a lower rate of interest at 8.6% from 8.7%.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!