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Govt Slashes Rates on Small Savings Schemes by up to 1.1 Per Cent, PPF Hits 46-Year Low of 6.4 Per Cent

Govt Slashes Rates on Small Savings Schemes by up to 1.1 Per Cent, PPF Hits 46-Year Low of 6.4 Per Cent

New Delhi: The Finance Ministry on Wednesday announced a sharp cut in interest rates for small savings schemes for the first quarter of the financial year 2021-22, which include public provident fund scheme as well. These rates remained unchanged for the last three quarters. Also Read – Government Extends Last Date For Linking Aadhaar with PAN from 31st March to June 30 | Details Here

The interest rate on Public Provident Fund (PPF) scheme has been slashed to 6.4 per cent for the April-June quarter from 7.1 per cent January-March period. For the first time since 1974, the PPF interest rate is now below 7 per cent, a 46-year low. Also Read – Pakistan’s Economic Coordination Council Allows Import of Cotton, Yarn From India

The interest rate of the savings deposit has been brought down to 3.5 from its earlier 4.0 per cent. For the first time, the interest rate on savings deposits has been reduced by 0.5 per cent to 3.5 per cent from the existing 4 per cent annually. Also Read – LDF Betrayed Kerala For Pieces Of Gold Just Like Traidor Betrayed Christ For Silver: PM Modi In Palakkad

Govt Slashes Rates on Small Savings Schemes by up to 1.1 Per Cent

Interest rates for small savings schemes are notified on a quarterly basis.

The rates of interest on various small savings schemes for the first quarter of the financial year 2021-22 starting from April 1 and ending on June 30, 2021, has been revised, the finance ministry said in a notification.

The interest rate for the five-year Senior Citizens Savings Scheme has also been reduced steeply by 0.9 per cent to 6.5 per cent. The interest on the senior citizens’ scheme is paid quarterly.

For the first time interest rate on savings deposits has been reduced by 0.5 per cent to 3.5 per cent from the existing 4 per cent annually. The steepest fall of 1.1 per cent has been effected in the one-year term deposit. The new rate will be 4.4 per cent as compared to 5.5 per cent at the moment.

Similarly, two-year fixed deposit will earn 0.5 per cent less at 5 per cent, three-year term deposit rate will be down by 0.4 per cent and five- year term deposit rate will be lower by 0.9 per cent at 5.8 per cent.

The girl child savings scheme Sukanya Samriddhi Yojana account will offer 0.7 per cent lower rate at 6.9 per cent rate during the first quarter of the next fiscal.

The annual interest rate on Kisan Vikas Patra (KVP) has been reduced by 0.7 per cent to 6.2 per cent from 6.9 per cent.

While announcing the quarterly setting of interest rates in 2016, the finance ministry had said that rates of small savings schemes would be linked to government bond yields.

Last month, the Reserve Bank of India (RBI) kept interest rates static for the fourth time in a row at 4 per cent on inflationary concerns.


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