In the quarterly revision, interest rates on small savings schemes backed by the central government, were cut amid falling interest rates across the financial system.
Excluding interest rates on savings accounts, interest rate on small savings schemes, including NSC (National Savings Cerificate) and PPF (Public Provident Fund) were lowered by 10 basis points for the July-September 2019 quarter.
In a notification, the Department of Economic Affairs under the Ministry of Finance, on Friday, informed of the following changes:
|Instrument||Interest rate from 1/4/2019 to 30/6/2019||Interest rate from 1/7/2019 to 30/9/2019||Compounding frequency|
|1 year time deposit||7%||6.90%||Quarterly|
|2 year time deposit||7%||6.90%||Quarterly|
|3 year time deposit||7%||6.90%||Quarterly|
|5 year time deposit||7.80%||7.70%||Quarterly|
|5 year recurring deposit||7.30%||7.20%||Quarterly|
|5 year senior citizen savings scheme||8.70%||8.60%||Quarterly and paid|
|5 year monthly income account||7.70%||7.60%||Monthly and paid|
|5 year National Savings Certificate (NSC)||8%||7.90%||Annually|
|Public Provident Fund||8%||7.90%||Annually|
|Kisan Vikas Patra||7.70%||7.60%||Annually|
|Sukanya Samriddhi Scheme||8.50%||8.40%||Annually|
Interest rates for these schemes are reviewed and revised ahead of every quarter based on economic factors generally dictating interest rates in the banking sector. Earlier this month, the Reserve Bank of India cut key rate, totalling a 75 basis points cut in the repo rate since the start of this year. Banks and other financial institutions also cut their interest rates on fixed deposit as well as loans to reflect the changes.