01 Jul, 2021 11:31a.m.

Government keeps small savings interest unchanged

government-keeps-small-savings-interest-unchanged

The Government has kept interest rates on small savings schemes, including NSC and PPF, unchanged for the second quarter of 2021-22 amid the ongoing coronavirus pandemic. The small savings schemes will continue to fetch small investors better rates than other fixed income avenues such as bank fixed deposits (FDs). Post office savings account is currently offering 4% per annum for savings account whereas SBI is offering 2.70% per annum and the ICICI Bank 3%.

The finance ministry has retained the interest rate on various small savings schemes for five quarters in a row.

The finance ministry notification read: "The rates of interest on various small savings schemes for the second quarter of the financial year 2021-22 starting from July 1, 2021, and ending on September 30, 2021, shall remain unchanged from the current rates applicable for the first quarter.

This means Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to carry an annual interest rate of 7.1% and 6.8%, respectively, in the second quarter as well. Earlier on 1 April, the Centre had swiftly revoked a steep interest rate cut of up to 1.1% for the first quarter on small savings schemes, citing oversight.

As a result, the first quarter rates were retained at the level of the fourth quarter of the last fiscal year. The cut was touted as the steepest cut in many decades.

The interest rates on various schemes are as follows.

  • Public Provident Fund Scheme or PPF interest rate is 7.1 per cent.
  • National Savings Certificate (NSC) interest rate is 6.8 per cent.
  • Kisan Vikas Patra interest rate is 6.9 per cent. The scheme will mature in 124 months.
  • Sukanya Samriddhi Scheme​​​​ interest rate is 7.6 per cent.
  • Senior Citizen Savings Scheme interest rate is 7.4 per cent.
  • The monthly Income Account​​ scheme interest rate is 6.6 per cent.
  • Post Office Savings Account​​ interest rate is 4 per cent.
  • 1-year Time Deposit interest rate is 5.5 per cent.
  • The 2-year time interest rate is 5.5 per cent.
  • The 3-year time deposit interest rate is 5.5 per cent.
  • The 5-year time deposit interest rate is 6.7 per cent.
  • The 5 Year Recurring Deposit Scheme​​ interest rate is 5.8 per cent.

Read the order here: Revision of interest rates for Small Savings Schemes – reg






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