Zee Media Bureau
New Delhi: Interest rate on small savings schemes, including PPF, Kisan Vikas Patra (KVP) and senior citizen deposits, will be cut by up to 1.3 percent from Friday as the government moves towards quarterly alignment of rates with the market.
Interest rate on Public Provident Fund (PPF) scheme will be 8.1 percent for the period April 1 to June 30, down from 8.7 percent.
On KVP, it will be reduced to 7.8 percent from 8.7 percent while senior citizen savings scheme of five years would earn 8.6 percent interest compared to 9.3 percent.
Girl-child saving scheme, Sukanya Samriddhi Account will see interest rate of 8.6 percent as against 9.2 percent, according to a Finance Ministry order.
However, unlike previous years when interest rates were set for the full year, the government will from now on set them every quarter, based on the previous 3-month yields on Government-Securities or G-Sec.
While the interest rate on Post Office savings has been retained at 4 percent, the same for term deposits of one to five years has been cut.
The popular Five-Year National Savings Certificates will earn an interest rate of 8.1 percent from April 1 as against 8.5 percent, at present.
A five-year Monthly Income Account will fetch 7.8 percent as opposed to 8.4 percent.
Post Office term deposits of one, two and three years command an interest rate of 8.4 percent but from April 1, a one-year time deposit will get 7.1 percent, two-year time deposit will earn 7.2 percent and 3-year time deposit will attract interest of 7.4 percent.
With PTI Inputs