The Centre on Friday cut interest rates for small savings schemes, including Public Provident Fund, by 0.1%, PTI reported. The figures are revised every quarter – the new rates are effective from April 1 to June 30. PPF investments will now have an annual interest rate of 7.9%.
The interest rates for a number of other schemes were also revised – they were set at 7.6% for the Kisan Vikas Patra scheme, 8.4% for the senior citizen’s five-year savings scheme and 8.4% for the girl child savings Sukanya Samriddhi Account scheme. However, interest on savings deposits has been retained at 4 per cent annually.
An overall drop in interest rates in the financial system led to the 0.1% cut. The Employees’ Provident Fund Organisation had earlier lowered the interest on provident fund deposits for the 2016-’17 financial year to 8.65% from 8.8%.
While announcing the quarterly interest rates, the Finance Ministry had said the rates of small saving schemes will be linked to government bond yields. The development is expected to encourage banks to lower the deposit rate, as well, according to PTI.