Small Savings Rates to Change from April 01,2016

The NDA Government substantially reduced interest rates payable on small savings like Public Provident Fund (PPF), Kisan Vikas Patra (KVP), Post Office Monthly Income Scheme, Post Office Fixed Deposit

Interest rate cuts on small savings sechemes:

Savings Plans	Revised Rate	Old Rate
Public Provident Fund	8.1%	8.7%
Kisan Vikas Patra	7.8%	8.7%
Post Office Deposit (1 Year)	7.1%	8.4%
Post Office Deposit (2 Year)	7.2%	8.4%
Post Office Deposit (3 Year)	7.4%	8.4%
Post Office Deposit (5 Year)	7.9%	8.5%
Sukanya Samriddhi Account	8.6%	9.2%
Senior Citizen Savings Scheme	8.6%	9.3%
Postal Savings Deposit	4%	4%

Scheme and Post Office Savings Account in a bid to align them closer to interest rates offered by other schemes including bank deposits.

It’s a move that will disappoint millions of small savers, who have invested in government savings schemes of less than five-year tenure.

 Many of the investors are government employees and lower income group people, who use these schemes as social security funds or savings for the rainy day.

As a part of its February 16 decision to revise interest rates on small savings every quarter, the interest rate on PPF scheme will be cut to 8.1 per cent for the period April 1 to June 30, from 8.7 per cent at present.

The interest rate on KVP will be cut to 7.8 per cent from 8.7 per cent. There is no change on Post Office savings at 4 per cent, but term deposits of one to five years
has been cut.

The five-year National Savings Certificates will earn an interest rate of 8.1 per cent from April 1, compared to 8.5 per cent, currently.

A five-year Monthly Income Account will fetch 7.8 per cent as opposed to 8.4 per cent now.

The girl-child savings scheme, Sukanya Samriddhi Account, will see an interest rate of 8.6 per cent as against 9.2 per cent, while the senior citizen savings scheme of five-year tenure would earn 8.6 per cent interest, compared to 9.3 per cent.

Post Office term deposits of one, two and three years command an interest rate of 8.4 per cent but from April 1, a one-year deposit will fetch 7.1 per cent, two-year deposit will earn 7.2 per cent and three-year deposit will attract interest of 7.4 per cent. Five-year deposit will fetch 7.9 per cent interest in the first quarter, compared to 8.5 per cent while the same on five-year RDs has been slashed to 7.4 per cent from 8.4 per cent.