The government has cut the interest rate on small savings schemes – Public Provident Fund (PPF), Kisan Vikas Patra and Sukanya Samriddhi schemes by 0.1 percent. This deduction will be for the July-September quarter. It is believed that this move can also reduce the interest rates on deposits by banks.
The interest rate on small savings schemes has been cut by 0.1 percent compared to the April-June quarter. However, the annual interest rate of four percent on savings accounts has been retained. Since April last year, interest rates on small savings schemes are being adjusted on a quarterly basis.
The Finance Ministry statement said that the Public Provident Fund (PPF) will now get the annual interest of 7.8 percent. 7.5% interest will be payable on Kisan Vikas Patra and it will mature in 115 months.
Sukanya prosperity accounts for girls will now get an annual 8.3 percent interest. So far 8.4% interest is being given to this scheme. A senior citizen scheme will be given an interest of 8.3 percent. In this scheme, interest is paid on quarterly basis. Similarly, the interest of one to five years will be charged from 6.8 to 7.6 percent, which will be paid on quarterly basis. At the same time, a recurring deposit of five years will be given a low interest of 7.1 percent.
Notifying the interest rates of small savings schemes for the second quarter of the financial year 2017-18, the Minister said that interest rates of small savings schemes are being notified on a quarterly basis as per the Government’s decision. Deciding quarterly interest rates, the Ministry said that the interest rates of small savings schemes will be linked to the receipt from government bonds. It is believed that after this government move, the bank can now reduce interest rates on small savings schemes.