The Centre on Wednesday cut interest rates for small savings schemes, including the popular Public Provident Fund scheme and National Savings Certificates, by 0.2%.
The interest rates are revised every quarter, and the new rates are effective from January 1 to March 31. PPF as well as NSC investments will now have an annual interest rate of 7.6%, a notification by the Ministry of Finance said.
The interest rates for some other schemes were also revised – they were set at 7.3% for the Kisan Vikas Patra scheme, 8.3% for the senior citizens’ five-year savings scheme and 8.1% for the girl child savings Sukanya Samriddhi Account scheme. The government retained the interest on savings deposits at 4%, compounded annually.
The move is expected to prompt banks to lower their deposit rates.