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.
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.
The interest rate for National Savings Certificate (NSC) was also slashed to 5.9 per cent from 6.8 per cent, while Sukanya Samriddhi Account’s scheme has been from 7.6 per cent to 6.9 per cent.
The rate cuts are in the range of 50 basis points (bps) to 110 bps. It may be noted that the Finance Ministry notifies interest rates on a quarterly basis.
As per the interest rate list, one-year time-deposit rates have been cut to 4.4% from 5.5% while for 2,3,5 year time deposit and 5-year recurring deposit interest rates applicable from tomorrow will be 5 per cent, 5.1 per cent, 5.8 per cent and 5.3 per cent respectively compared to 5.5 per cent, 5.5 per cent, 6.7 per cent and 5.8 per cent, respectively.
The interest rate for Senior Citizen Savings Schemes was also reduced by 90 bps to 6.5 per cent.
The rate for Kisan Vikas Patra, too, has been from 6.9 per cent to 6.2 per cent. The maturity period for Kisan Vikas Patra has also been increased to 138 months from 124 months.
The interest rate for savings deposits has been cut to 3.5 per cent from 4 per cent, while 1-5 year time deposit will fetch interest in the range of 4.4 per cent-5.8 per cent. The interest rate for a 5-year recurring deposit has also been cut by 50 basis points to 5.3 per cent.