The NDA Government Wednesday Dec27,2017 slashed interest rates on small savings schemes,
including NSC and PPF, by 0.2 percentage points for the January-March
period from the rates applicable in the previous quarter, a move that
will prompt banks to lower deposit rates. However, the interest rate in
the five-year Senior Citizens Savings Scheme has been retained at 8.3
per cent. The interest on the scheme is paid quarterly.
A Finance Ministry notification said rates have been reduced across the
board for schemes such as National Savings Certificate, Sukanya
Samriddhi Account, Kisan Vikas Patra and Public Provident Fund (PPF).
However, the interest on savings deposits has been retained at 4 per
cent annually.
As per the notification, PPF and NSC will fetch a lower annual rate of
7.6 per cent while KVP will yield 7.3 per cent and mature in 11 months.
The girl child savings scheme, Sukanya Samriddhi Account, will offer 8.1
per cent against the existing 8.3 per cent annually.
Term deposits of
1-5 years will fetch a lower interest rate of 6.6-7.4 per cent, to be
paid quarterly, while the five-year recurring deposit is pegged at 6.9
per cent.
“On the basis of the decision of the government, interest rates for
small savings schemes are to be notified on a quarterly basis,” the
ministry said, while notifying the rates for fourth quarter of financial
year 2017-18.
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