Last updated on December 29th, 2017 at 12:35 pm
On 27th December, government has decided to bring down interest rates on small savings scheme which includes NSC (National Savings Certificate) and PPF (Public Provident Fund) by 0.2 percent for the January to March period from the rates applicable in the previous quarter; it is a move that will result in banks to lower deposit rates.
Simultaneously, investments in the five – year Senior Citizens Savings Scheme will perpetuate at 8.3 percent. On Senior Citizens’ scheme, the interest rate is paid quarterly.
A notification released by the finance ministry reads that it has reduced the interest rates of many small savings schemes.
Interest rates on all small savings schemes are updated on a quarterly basis since April last year.
According to the notification which was released by the finance ministry
Sukanya Samriddhi Account which is a girl child savings scheme will offer 8.1 percent where the present interest rate of the scheme is 8.3 percent annually.
At the time of notifying the rates for the fourth quarter of the financial year 2017 – 18, the ministry further says that
Furthermore, the ministry says that rates of small savings scheme would be linked to government bonds yields. And the move is likely to see banks lowering their deposit rates in line with the small savings rate offered by the government.