Zee Media Bureau
New Delhi: Government on Tuesday cut interest rates on small savings of 1, 2, 3 year term deposits; Kisan Vikas Patra and 5-year Recurring Deposit by 0.25 percent.
However, interest rate on PPF, 5-year National Savings Certificate (NSC) and monthly income schemes (MIS) left untouched. Currently, PPF deposits get 8.7 percent interest rate while girl child scheme Sukanya Samriddhi Yojana commands 9.2 percent. MIS gets 8.4 percent interest rate.
Post office savings of 1, 2 and 3 year term deposits, Kisan Vikas Patra (KVP) as well as 5-year Recurring Deposits till now earned 0.25 percent higher interest than the Government securities of similar tenures. This advantage has been withdrawn with effect from April 1, 2016, a Finance Ministry statement said, adding henceforth the rates would be revised every quarter.
Now, small savings interest rates will be set quarterly from April 1 to align them with market rate of G-Secs.
Small 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.