Interest Rates Cut on PPF, NSC, other small savings schemes withdrawn, announces FM

The finance ministry has withdrawn its decision to slash interest rates on small savings schemes like the Public Provident Fund and the National Savings Certificate (NSC), terming it an “oversight”, on Thursday. The rates on such schemes will continue to remain as they were during the January-March quarter, reversing the cut on interest rates of up to 110 basis points or 1.1 percentage points announced a day earlier.

“Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn,” FM Sitharaman tweeted. 

Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021.
Orders issued by oversight shall be withdrawn. @FinMinIndia @PIB_India

— Nirmala Sitharaman (@nsitharaman) April 1, 2021

Interest rates on small savings schemes, which are considered the common man’s safety net, were hiked on Wednesday for the first quarter of the financial year starting April 1, 2021.

Govt Withdraws Interest Rate Cut on Small Saving Schemes | Top Points.

1. Notably, interest rates for small savings schemes are notified on a quarterly basis. The Central government on Wednesday cut interest rates on small savings schemes, including NSC and PPF, by up to 1.1 per cent for the first quarter of 2021-22 in line with falling fixed deposit rates of banks.
2. However, following the announcement by FM Sitharaman, the interest rates will be restored to the level of March 31, 2021. This means current rate of interest on Savings deposit will continue to be 4 per cent.
3. The 1-year Time deposit interest rate will remain at 5.5 per cent.
4. The 2-year time deposit interest rate will remain unchanged at 5.5 per cent.
5. The 3-year time deposit will continue to be 5.5 per cent.
6. The 5-year time deposit interest rate will be 6.7 per cent.
7. The 5-year recurring deposit interest rate will be 5.8 per cent.
8. The Senior Citizen Savings Schemes interest rate will remain as 7.4 per cent.
9. Monthly Income Account interest rate will be 6.6 per cent.
10. National Savings Certificate  rate of interest will be 6.8 per cent.
11. Public Provident Fund Scheme or PPF interest rate will be 7.1 per cent.
12. Kisan Vikas Patra interest rate will be 6.9 per cent with maturity tenure of 124 months.

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Sukanya Samriddhi Account Scheme interest rate will remain t 7.6 per cent.