Rates cut for small savings

New Delhi, Dec. 27: The Centre on Wednesday slashed interest rates on small savings schemes, including NSC and PPF, by 0.2 percentage point for the January- March period from the rates applicable in the previous quarter, a move that will prompt banks to lower deposit rates.

At the same time, investments in the fiveyear Senior Citizens Savings Scheme has been retained at 8.3 per cent. The interest rate on the senior citizens scheme is paid quarterly.

A finance ministry notification said rates have been reduced across the board for schemes such as National Savings Certificate ( NSC), Sukanya Samriddhi Account, Kisan Vikas Patra ( KVP) and Public Provident Fund ( PPF).

However, interest on savings deposits has been retained at per cent annually.

Since April last year, interest rates on all small savings schemes have been recalibrated on a quarterly basis.

As per the notification, PPF and NSC will fetch a lower annual rate of 7.6 per cent while KVP will yield 7.3 per cent and mature in 11 months.

The girl child savings scheme will offer 8.1 per cent from existing 8.3 per cent annually.

Term deposits of 1- 5 years will fetch a lower interest rate of 6.6- 7.4 per cent, to be paid quarterly, while the five- year recurring deposit is pegged at 6.9 per cent. 4

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