Finance Minister Nirmala Sitharaman on Thursday said there will be no change in the interest rates of small saving schemes for the first quarter (April-June) of the financial year 2021-’22, adding that they will continue to be at the rates which existed in the last quarter.
Sitharaman said that the circular released on Wednesday announcing significant cuts in the interest rates had been “issued by oversight and will be withdrawn”.
On Wednesday, a circular released by the central government said that 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, had 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.