Big interest rate cuts in PPF, other small savings schemes
New Delhi : After Reserve Bank of India’s (RBI) decision to cut its policy rates, the interest rates on small savings schemes including, PPF fell on Tuesday. The government revised the interest rates on small savings scheme for April-June by anywhere between 70-140 bps.
Amid economic damage faced by India due to novel coronavirus, the RBI had recently announced a surprise 75 bps cut in its key interest rate.
The Public Provident Fund will now fetch 7.1% returns, after an 80 bps cut in its interest rate. It used to earlier give 7.9% returns to its depositors.
The interest rate on the National Savings Certificate has been reduced by 110 bps to 6.8%.
The interest rate on Kisan Vikas Patra has been cut by 70 bps to 6.9%, which will mature in 124 months. The interest rate for 5-year Senior Citizens Savings Scheme was slashed by 120 bps to 7.4% as against 8.6% earlier.
The interest rates on the savings accounts have been kept unchanged at 4 per cent a year. The interest on the senior citizens' scheme is paid quarterly.
On 31 December 2019, the government decided to keep interest rates for small savings schemes like PPF and NSC unchanged at 7.9% for the fourth quarter of the current financial year, while the rate for the Kisan Vikas Patra maturing in 113 months was kept at 7.6%.
The Sukanya Samriddhi Yojana will offer 7.6% in the April-June 2020 quarter as against 8.4% during the January-March 2020 quarter.
The interest rate on five-year Recurring Deposit Rate sees a 140 bps cut to 5.8%.