Zee Media Bureau
New Delhi: Interest rate on various small savings like Public Provident Fund (PPF), National Savings Certificate (NSC) and Post Office savings are set to fall as the government is contemplating reduction in rates.
In addition to this, banks are also expected to follow the small savings rate cut with lower fixed deposit rates. As per a report in the Economic Times the new rates are expected to be notified over the next few days.
Smalls saving schemes include Post Office Monthly Income Scheme (MIS), PPF, Post Office fixed Deposit Scheme, Senior Citizens Savings Scheme, Post Office Savings Account and Sukanya Samriddhi Accounts.
RBI and banks have been pressing for reduction in small savings rates and bring them in line with market rate for effective transmission of monetary policy.
With small saving deposits commanding a rate of 8.7-9.3 percent, banks have been reluctant to transmit the entire policy rate reduction by Reserve Bank to borrowers.