From April 1, Recurring Deposit Small Savings Scheme Interest Rate Cut To 5.8%
From April 1, the government has lowered the interest rate for the Recurring Deposit (RD) small savings scheme by 140 basis points (1.4 percentage point). For the quarter ended March 31, investment in the post office five-year recurring deposit account yielded interest at the rate of 7.2 per cent. After the latest reduction, investment in a recurring deposit small savings scheme will fetch a return of 5.8 per cent per annum, compounded quarterly, according to an official statement. Currently, the government reviews the interest rates for small savings schemes every quarter.
While Recurring Deposit now fetches a 5.8 per cent return, here are the interest rates applicable to other small savings schemes:
| Instrument | Interest Rate In January-March | Interest Rate In April-June | Compounding Frequency |
|---|---|---|---|
| Savings Deposit | 4% | 4% | Annually |
| One-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Two-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Three-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Five-Year Time Deposit | 7.7% | 6.7% | Quarterly |
| Senior Citizen Savings Scheme (SCSS) | 8.6% | 7.4% | Quarterly and paid |
| Monthly Income Account | 7.6% | 6.6% | Monthly and paid |
| National Savings Certificate | 7.9% | 6.8% | Annually |
| Public Provident Fund | 7.9% | 7.1% | Annually |
| Kisan Vikas Patra | 7.9% (matures in 113 months) | 6.9% (matures in 124 months) | Annually |
| Sukanya Samriddhi Account | 8.4% | 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 Senior Citizen Savings Scheme (SCSS) by 80-140 basis points (0.8-1.4 percentage point). A small savings scheme account can be set up at designated branches of India Post.