INTEREST RATES FOR SMALL SAVINGS CUT

Move to prompt banks to lower their deposit rates too

New Delhi, March 31: The government has lowered interest rates on small saving schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi scheme by 0.1 per cent for the April-June quarter, a move that would prompt banks to cut their deposit rates.

New Delhi, March 31: The Centre has lowered interest rates on small saving schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi scheme by 0.1 per cent for the April-June quarter, a move that would prompt banks to cut their deposit rates.

For April-June, these have been lowered by 0.1 per cent across the board compared to January-March. However, interest on savings deposits has been retained at 4 per cent annually. Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.

A finance ministry notification said investments in the public provident fund scheme will fetch lower annual rate of 7.9 per cent, the same as 5year National Savings Certificate. The existing rate for these two schemes is 8 per cent.

Kisan Vikas Patra investments will yield 7.6 per cent and mature in 112 months.

The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.4 per cent annually, from 8.5 per cent at present, while it will be the same at 8.4 per cent for the 5-year senior citizens savings scheme. The interest rate on the scheme is paid quarterly.

Term deposits of 1-5 years will fetch a lower 6.9-7.7 per cent that will be paid quarterly while the 5year recurring deposit has been pegged lower at 7.2 per cent. “On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis,” the ministry said while notifying the rates for the fourth quarter of 2016-17 starting from April 1, 2017.

Meanwhile, the senior citizen savings scheme witnessed a surge in deposits post note ban with 32,634 deposits made till Dec. 30, Parliament was informed on Friday. “32,634 deposits were made in the senior citizen savings scheme during demonetisation period which is higher than the average deposits in two months of the pre-demonetisation period based on the figures of last 3 years,” communications minister said. — PTI

A FINMIN notification said investments in the PPF scheme will fetch lower annual rate of 7.9%, the same as 5-year National Savings Certificate.