PPF, NSC, Kisan Vikas Patra, Sukanya Samriddhi Scheme,​​​​ Savings Deposit and other Small Savings Schemes’ interest rates have been kept unchanged till September 30, 2021. The Central government’s decision came as a welcome relief to small savings schemes investors amid the ongoing Covid pandemic. The interest rates on small savings schemes are applicable for the period between July 1, 2021 and September 30, 2021, according to a PTI report.

“The rate of interest on various savings schemes for the 2nd quarter of Financial year 2021-22 starting from 1st July, 2021 and ending on 30th September, 2021 shall remain unchanged from the current rates applicable for the first quarter (1st April, 2021 to 30th June, 2021 for FY 2021-22,” said the Ministry of Finance in a statement.   

Earlier on April 1, the Centre had rolled back its decision to cut interest rates on small savings schemes, soon after announcing it on March 31. It had announced a cut in small savings deposit rate from 4 percent to 3.5 percent for the first quarter of the financial year starting April 1, 2021.  

Here is a look at the interest rates on various small savings schemes for the second quarter of FY 2021-22.

From July-September, PPF will fetch an interest of 7.1 per cent per annum. The interest rate of National Savings Certificate (NSC) remained unchanged at 6.8 per cent. Among the other small savings schemes, the Sukanya Samriddhi Yojana will now attract an interest of 7.6 per cent per annum.

Investors will get a 4 per cent interest rate on post office savings account. For  deposits with one year tenure, the interest rate has been fixed at 5.5 per cent. The interest rates will remain unchanged at 5.5 per cent with two to three year deposits. For deposits accounts with five years tenure, individuals can get up to 6.7 per cent interest rates during the September quarter.

The interest rate for five year recurring deposits will be 5.8 per cent in July-September quarter. Kisan Vikas Patra, a certificate scheme, will fetch an interest of 6.9 per cent.

How interest rates are fixed for small savings schemes
The government reviews and announces the interest rates on small savings schemes every three months. The formula to calculate the interest rates on small savings scheme was suggested by the Shyamala Gopinath Committee. The committee had suggested that the interest rates on different schemes should be 25-100 basis points higher than the yields on government bonds of similar maturity.