Interest rate on small savings like PPF cut from 8 to 7.90 per cent

PPF scheme would fetch lower annual rate of 7.9%, the same as 5-year National Savings Certificate

The government has lowered the interest rates on small saving schemes such as Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and Sukanya Samriddhi scheme by 0.1% for the April-June quarter, a move that would prompt banks to cut their deposit rates.

For April-June, these have been lowered by 0.1 % across the board compared to January-March. However, interest on savings deposits has been retained at 4% annually. Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.

A Finance Ministry notification said investments in the PPF scheme would fetch lower annual rate of 7.9%, the same as 5-year National Savings Certificate. The existing rate for these two schemes is 8%. KVP investments will yield 7.6% and mature in 112 months.

The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.4% annually, from 8.5% at present, while it will be the same at 8.4% for the five-year Senior Citizens Savings Scheme. The interest rate on the senior citizens scheme is paid quarterly. Term deposits of 1-5 years will fetch a lower 6.9-7.7% that will be paid quarterly while the five-year recurring deposit has been pegged lower at 7.2%.