New Delhi. The government has announced a 0.2 percent reduction in interest rates on various small savings schemes on Wednesday. According to the Finance Ministry, interest rates for the January-March quarter have been reduced by 0.2 percent on small savings schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi Yojana.
From April 2016, interest rates for all small savings schemes are revised on a quarterly basis. Earlier, the government had not made any change in interest rate on the small savings schemes for the October-December quarter.
The interest rate on the five-year senior citizen savings scheme will remain only 8.3 percent, no change has been made. Interest rates are given to senior citizens on a quarterly basis. According to the notification of the Finance Ministry, interest rates on schemes like National Savings Certificate (NSC), Sukanya Samriddhi Yojana, Kisan Vikas Patra (KVP) and PPF have been reduced. However, the interest rate on bank savings deposits has been kept up to 4 percent annually.
According to the notification, interest on PPF and NSC will be 7.6 percent, while KVP will get 7.3 percent interest and it will mature in 11 months. The interest rate on the Sukanya Prosperity Account will be 8.2 percent, which is 8.3 percent now.
For a period of one to five years, the interest rate on the term deposit will be 6.6 to 7.4 percent. This interest will be available on a quarterly basis. At the same time, the interest rate on recurring deposits will be 6.9 percent.
Notifying the interest rate for the fourth quarter of 2017-18, the Ministry said that interest rates on small savings schemes are notified on a quarterly basis on the basis of the government decision. Announcing the interest rate for each quarter, the Ministry had said that interest rates on small savings schemes would be linked to the government bond returns. After this step, the bank can reduce the interest rate on its deposits.