The government on Tuesday cut interest rates on small savings, to counter the economic impact of the coronavirus pandemic, Mint reported.
The Public Provident Fund will now fetch 7.1% returns, after an 80 basis points cut in its interest rate. Earlier, the rate was 7.9%.
The rate of interest on National Savings Certificate has been slashed from 7.9% to 6.8%. The interest rate on Kisan Vikas Patra has been cut by 70 bps to 6.9%, which will mature in 124 months.
On the other hand, the government reduced the interest rate on five-year Senior Citizens Savings Scheme by 120 bps to 7.4%. The interest on the the savings scheme is paid quarterly. However, the interest rate on savings deposits was kept unchanged at 4%.
The Sukanya Samriddhi Yojana will offer 7.6% in the April to June 2020 quarter as against 8.4% during the January to March 2020 period. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child.
The interest rate on five-year deposits was cut from 7.2% to 5.8%. For a five-year time-deposit, it was brought down from 7.7% to 6.7%, and from 6.9% to 5.5 per cent for three-years, two-years and one-year time deposits.
The Reserve Bank of India had on March 27 slashed the repo rate by 75 basis points to 4.4%, and allowed commercial banks and non-banking financial corporations a three-month moratorium on payment of installments of all term loans, in urgent measures taken to revive the economy. RBI Governor Shaktikanta Das said the reverse repo rate was also cut by 90 basis points to 4%. The reverse repo rate is the rate at which the central bank borrows money from commercial banks.
The coronavirus has so far claimed 35 lives in India. A total of 1,397 cases have been reported, of which 1,238 are active cases, according to the Ministry of Health and Family Welfare.