Interest rate on small savings schemes lowered by 0.1%

The Finance Ministry has recently informed that interest rates for small savings schemes will be lowered by 10 basis points for July-September quarter of the ongoing financial year. Among others, schemes which will fetch lower interest are Kisan Vikas Patra (KVP), Public Providend Fund (PPF), barring interest on savings deposits that has been retained at 4%.

“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 a statement.

he decision to lowering interest rates on small savings scheme comes at the backdrop of when the banking regulator has slashed benchmark rates thrice by cumulative 75 basis points since January.

PF and National Savings Certificate (NSC) will yield 7.9% annual interest from the earlier 8%. KVP will fetch 7.6% with maturity of 113 months as compared with 7.7% with maturity of 112 months.

ompared with 8.5%, a lower return of 8.4% will be fetched by the girl child savings scheme Sukanya Samriddhi Account. Similarly, 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%.