The government for the last quarter of FY 2020 kept the interest rates steady even as there were reports doing the rounds that the RBI has been nudging the centre to reduce interest rates on these schemes such that banks in tandem can reduce interest rate on fixed deposits as well as loan and enable improved transmission of RBI's key policy rate.
Interest rate on these GOI-backed small savings schemes are revised every quarter based on the yield on benchmark 10-year government bonds.
"The rates of interest on various small savings schemes for the fourth quarter of the financial year 2019-20 starting January 1, 2020, and ending on March 31, 2020, shall remain unchanged from those notified for the third quarter of the financial year 2019-20," the finance ministry said in a notification.
So different small savings schemes for the Jan-March quarter of FY20 will fetch return as specified below:
|Small Savings Scheme||Interest rate per annum|
|SCSS or Senior citizen savings scheme||8.6%|
|Post office savings account||4%|
Earlier due to worries around spiking inflation, the RBI in its December monetary policy meet after back to back rate cut of 135 bps in the last calendar year held key policy rates steady at 5.15%.