Government Hikes Interest Rates on Small Savings like PPF, NSC

HIKE IN INTEREST RATES

Good news for small savers and investors, particularly those who bank on small savings schemes such as NSC, MIS and PPF for day-to-day living or retirement income. For, after a long time, the government has increased the interest rates on small savings schemes. In fact, the interest rates of small savings schemes such as PPF, NSC, SSAS and KVP, among others, have been increased by 0.3% to 0.4% in respect of quarter 3 of the Financial Year 2018-19 (i.e. October 1, 2018 to December 31, 2018), compared to those of Q1/ Q2 of Financial Year 2018-19.

“It’s for the first time that the government has announced an upward change in the interest rates of small saving schemes since the quarterly review system of interest rates has been implemented in the Q1 of FY 2016-17. Hopefully, the increased interest rates will be beneficial for the retired pensioners, old age persons, etc., those who are mainly dependent on the interest income from investments in small saving schemes,” ICAI said in its income tax update.

Earlier, the government had notified that there would be no change in the interest rates of various small savings schemes for the period April 1, 2018 to June 30, 2018 and July 1, 2018 to September 30, 2018 (i.e. applicable during the Q1/ Q2 of FY 2018-19), as compared to the Q4 of FY 2017-18.

Here is the summarised table of the revised rates of interest on various small savings schemes for FY 2018-19:

Source: Financialexpress

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