This Article is From Apr 06, 2020

15-Year Public Provident Fund: From April 1, Interest Rate Cut To 7.1% From 7.9%

PPF Interest Rate: A Public Provident Fund account can be set up at designated branches of post office and commercial banks for a lock-in period of 15 years.

15-Year Public Provident Fund: From April 1, Interest Rate Cut To 7.1% From 7.9%

Public Provident Fund Interest Rate: The interest accrued on a PPF account is compounded annually

From April 1, investment in the Public Provident Fund (PPF), which is one of the nine government-run small savings schemes, fetches return at the rate of 7.1 per cent. That is 80 basis points lower compared with the interest rate of 7.9 per cent paid in the January-March quarter. A Public Provident Fund account can be set up at designated branches of post office and commercial banks for a lock-in period of 15 years. The interest accrued on a PPF account is compounded annually. 

While the 15-year PPF account now pays a 7.1 per cent return, here are the interest rates applicable to other small savings schemes:

InstrumentInterest Rate In January-MarchInterest Rate In April-JuneCompounding Frequency
Savings Deposit4%4%Annually
One-Year Time Deposit6.9%5.5%Quarterly
Two-Year Time Deposit6.9%5.5%Quarterly
Three-Year Time Deposit6.9%5.5%Quarterly
Five-Year Time Deposit7.7%6.7%Quarterly
Five-Year Recurring Deposit7.2%5.8%Quarterly
Senior Citizen Savings Scheme (SCSS)8.6%7.4%Quarterly and paid
Monthly Income Account7.6%6.6%Monthly and paid
National Savings Certificate7.9%6.8%Annually
Kisan Vikas Patra7.9% (matures in 113 months)6.9% (matures in 124 months)Annually
Sukanya Samriddhi Account8.4%7.6%Annually
(Source: dea.gov.in)

For the first quarter of financial year 2020-21, the government has lowered interest rates on most small savings schemes such as the Kisan Vikas Patra (KVP), the Senior Citizen Savings Scheme (SCSS) and the National Savings Certificates (NSC) by 80-140 basis points (0.8-1.4 percentage point), according to an official statement.