In a move which could disappoint thousands of individuals, the government has decided to keep the interest rates for small savings schemes unchanged, contrary to the expectations of certain experts in the field.
The interest rates for Q2 of the year (July-September) will remain the same as the previous quarter. The savings schemes which see no change in their interest rate include the PPF, post office monthly income scheme, NSC, and Senior Citizens Savings Schemes.
The Ministry of Finance through a statement conveyed the information regarding the same.
While deposits under PPF will earn an interest of 7.6 per cent p.a., deposits under Kisan Vikas Patra will earn an interest of 7.3 per cent p.a.
|Scheme||Interest rate for Q2 (%)|
|Sukanya Samriddhi Account||8.1|
|Kisan Vikas Patra||7.3|
|Time deposit – 1 year||6.6|
|Time deposit – 2 years||6.7|
|Time deposit – 3 years||6.9|
|Time deposit – 5 years||7.4|
|RD – 5 years||6.9|
|5 year senior citizen savings scheme||8.3|
The move not to increase interest rates could make bank FDs more attractive to investors. Banks such as SBI recently hiked the interest rates on their FDs.
While the Shyamala Gopinath Committee had recommended a formula to fix the interest rates for small savings schemes, this formula has not been not implemented in a few quarters.
Sources: Livemint, Economic TImes