Government Revises Small Savings Scheme Rate Lower By 0.1%

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With effect from July 1, government has reduced interest rates on small saving schemes by 0.1%point for all of the schemes except for savings deposits. For the small savings scheme, government revises the rate quarter-on-quarter basis in line with yield on government securities in the secondary capital markets.

Government Revises Small Savings Scheme Rate Lower By 0.1%

For the small savings scheme the rates have been unchanged as banks are unable to reduce their deposit rates and lending rates. However excess of liquidity as a result of demonetization has enabled banks to lower interest rates. For savings deposit the rates have been kept at 4%.

The interest rate on PPF have been reduced from the prevailing 7.9% to 7.8%. NSC with a maturity term of 5 years shall also get lower interest rate of 7.8% as against the previous 7.9%. Kisan Vikas Patra or KVP will fetch return of 7.5% as against 7.6%

Fixed deposits based on the maturity term will fetch returns anyway between 6.8% and 7.6%. Sukanya Samriddhi saving scheme and five-year senior citizens savings scheme shall bear 8.3% return instead of 8.4%.The rates for the small savings scheme shall be revised again on September 30.

Story first published: Saturday, July 1, 2017, 10:05 [IST]
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