Government cuts interest rates on small saving schemes for July-sept quarter.
AGENCIES / NEW DELHI
The government today reduced interest rate on small savings schemes, including NSC and PPF, by 10 basis points for the July-September quarter. The Reserve Bank of India has cut interest rate by 75 basis points since the start of this year while many banks have also lowered their fixed deposit or FD rates.
The interest rate on small savings schemes including PPF, which are revised on a quarterly basis, had seen a sharp hike in October-December quarter and since then they had remained steady.
For the July-September quarter, PPF and National Savings Certificate will fetch an annual interest rate of 7.9% as compared to 8% earlier while Kisan Vikas Patra (KVP) will yield 7.6% with maturity of 113 months. At present, interest rate on KVP is 7.7% and maturity is 112 months.
The move is aimed at matching the softening of interest rates in the banking sector since the RBI cut its benchmark policy rate thrice during the 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 while notifying the rates for the second quarter of financial year 2019-20.
“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 while notifying the rates for the second quarter of financial year 2019-20.
The girl child savings scheme Sukanya Samriddhi Account will fetch 8.4%, from 8.5%.
Post office term deposits of 1-3 years will fetch interest rate of 6.9%, to be paid quarterly, while the five-year quarterly pegged at 7.7% and for recurring 7.2% from existing rate of 7.3%.
Interest rate for the five-year Senior Citizens Savings Scheme will now fetch a lower rate of interest at 8.6% from 8.7%.