Government Slashes Interest Rates on Small Saving Schemes

According to the Department of Economic Affairs, the decision of reduced interest rates on Small Saving Schemes will come in effect from April 1, 2020.

Created On: Apr 1, 2020 11:48 IST
Govt Slashes Interest Rates
Govt Slashes Interest Rates

The interest rates on small saving schemes have been slashed by the central government for the April-June quarter of the financial year 2020-2021. The decision has come after the Reserve Bank of India’s recent 75 bps cut in the interest rates at the time of economic fallout due to COVID-19 Pandemic.

The government revises interest rates on small saving schemes on a quarterly basis. According to the Department of Economic Affairs, the decision of reduced interest rates will come in effect from April 1 for this quarter.

Presently, the Ministry of Finance offers 9 types of small saving schemes and the interest rates on these schemes are reviewed every quarter. The offered schemes include Kisan Vikas Patra, Public Provident Fund (PPF), Senior Citizen Saving schemes (SCSS) and Sukanya Samriddhi.

Key Highlights

  • The interest rate on Public Provident Fund (PPF) for the April-June quarter is now 7.1 percent. It has been brought down by 80 bps (basic points).
  • The interest rate on Kisan Vikas Patra has been slashed down to 6.9 percent.
  • For Sukanya Samriddhi Scheme, the interest rate for the quarter is now 7.6 percent.
  • For National Saving Certificate Scheme, the interest rate by the government has been brought down to 6.8 percent.
  • For five-year recurring deposits, the interest rate has been lower down to 5.8 percent.
  • For a five-year time deposit, the quarterly interest rate has been brought down to 6.7 percent.

Nine Small Saving Schemes and the Interest Rates for April-June Quarter:

Schemes

Interest Rates

Post Office Savings Account

4%

5 Year Post Office Recurring Deposit (RD) Account

5.8%

Post Office Time Deposit Account (5 Year)

6.7%

Post Office Monthly Income Scheme Account (MIS)

6.6%

Senior Citizen Saving Schemes (SCSS)

7.4%

15 Year Public Provident Fund Account (PPF)

7.1%

National Saving Certificates (NSC)

6.8%

Kisan Vikas Patra (KVP)

6.9%

Sukanya Samriddhi Account

7.6%

Source- dea.gov.in

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