The Centre on Wednesday announced significant cuts in interest rates of small saving schemes for the first quarter (April-June) of the financial year 2021-’22, which begins from Thursday, BloombergQuint reported, citing a finance ministry circular.
According to the circular, interest rates on savings deposits have been cut from 4% to 3.5%. Meanwhile, interest rates on fixed deposits have been slashed in the range of 0.4% to 1.1%, across various tenors.
The rate of interest in the popular saving scheme Public Provident Fund, or PPF, has been reduced from 7.1% to 6.4%. Similarly, the interest rate for the five-year Senior Citizens Savings Scheme has been lowered to 6.5%, and that on Kisan Vikas Patra has been cut to 6.2%.
For the April-June quarter of this financial year too, the government had cut interest rates on small savings schemes by up to 1.4%. The interest rate on PPF was then reduced by 0.8%. As a result, rates on PPF have now been reduced by 1.5% since first quarter of the financial year 2020-’21. The interest rates for small savings schemes are reviewed and notified by the finance ministry on a quarterly basis.
In another important decision on Wednesday, the finance ministry further extended the deadline for linking Aadhaar with Permanent Account Number, or PAN, till June 30. The deadline was earlier scheduled to end on Wednesday.