- Government cuts interest rates on small savings schemes NSC, PPF, others
- Interest rate cut by 0.2 percentage point for January-March
- Move to prompt banks to lower deposit rates
At the same time, investments in the five-year Senior Citizens Savings Scheme has been retained at 8.3 per cent. The interest rate on the senior citizens' scheme is paid quarterly.
A finance ministry notification said rates have been reduced across the board for schemes such as National Savings Certificate (NSC), Sukanya Samriddhi Account, Kisan Vikas Patra (KVP) and Public Provident Fund (PPF). However, interest on savings deposits has been retained at 4 per cent annually.
Since April last year, interest rates on all small savings schemes have been recalibrated on a quarterly basis.
As per the notification, PPF and NSC will fetch a lower annual rate of 7.6 per cent while KVP will yield 7.3 per cent and mature in 118 months.
The girl child savings scheme Sukanya Samriddhi Account will offer 8.1 per cent from existing 8.3 per cent annually.
"On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis," the ministry said, while notifying the rates for fourth quarter of financial year 2017-18.
While announcing the quarterly setting of interest rates, the ministry had said that rates of small savings schemes would be linked to government bond yields. The move is expected to see banks lowering their deposit rates in line with the small savings rate offered by the government.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)