Sharp cut in interest rates on small savings schemes
The central government on Wednesday slashed interest rates on small saving schemes for the first quarter of the next fiscal. The interest rate on various small saving schemes has been cut in the range of 50-110 basis points from January-March 2021 to April-June 2021, according to a notification by the Finance Ministry.
One of the sharpest cuts was seen in the term deposit schemes, with interest rate on a one-year time deposit being reduced from 5.5% to 4.4%. The returns on the five-year time deposit will fall from 6.7% in January-March to 5.8% in April-June.
The interest rate on the Public Provident Fund scheme savings have been reduced to 6.4% from 7.1% during this period. With this, the interest rate on PPF stand at a 46-year-low. From April 1, the interest rate on National Savings Certificate would be 5.9%, down from 6.8% earlier. The returns on Senior Citizen Savings Scheme would be at 6.5% against 7.4% earlier, and on savings deposit it will be 3.5%, compared to 4% at present. Interest rates for small savings schemes are notified on a quarterly basis.
