Interest rates on small savings unchanged for Jan-Mar quarter
03 Jan 2017
The slump in interest rates will not affect small savers at least for the January-March quarter as the government has decided against a revision in interest rates on small saving schemes like Public Provident Fund (PPF), Kisan Vikas Patra, Sukanya Samriddhi Account and Senior Citizens Savings Scheme.
For the January-March quarter, the interest rates on small savings will remain unchanged from the rates prescribed for the October-December quarter.
The move comes at a time when banks have cut their deposit rates in the wake of the 8 November demonetisation.
Investments in PPF will continue to fetch an annual rate of 8 per cent, the same as the five-year National Savings Certificate, a finance ministry notification said.
Kisan Vikas Patra (KVP) investments will continue to yield 7.7 per cent and mature in 112 months. The Sukanya Samriddhi Scheme and the five-year Senior Citizens Savings Scheme will earn an 8.5 per cent interest. The interest on the senior citizens savings scheme is paid quarterly.
Post office savings deposit will fetch 4 per cent interest annually, while term deposits of 1-5 years will offer 7-7.8 per cent, which will be paid quarterly.
Kisan Vikas Patra (KVP) investments will continue to yield 7.7 per cent and mature in 112 months.
The Sukanya Samriddhi Account Scheme for the girl child will continue to give out 8.5 per cent annually while it will be the same as 8.5 per cent for the 5-year Senior Citizens Savings Scheme. Interest rate on senior citizens savings scheme is paid quarterly.
A savings deposit will fetch 4 per cent interest annually while term deposits of 1-5 years will offer 7-7.8 per cent that will be paid quarterly. The 5-year recurring deposit will continue to earn you 7.3 per cent rate.
"On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis," the ministry said while notifying the interest rates for the fourth quarter of 2016-17 starting from January 1, 2017, and ending on March 31.
Interest rates on small savings are being reviewed every quarter since April last year.
Investors keep small savings as a security fund for a rainy day.