Interest on small saving schemes hiked

                                                      (Image Source: Deccan Herald)

Chennai, September 20: The government has hiked the interest of various small saving schemes like the Public Provident Fund(PPF), Sukanya Samridhi Yojana(SSY), National Saving Certificate(NSC) and Post Office Time Deposits with effect from October 1.

After the revision, the interest rate for the five-year Senior Citizens Savings Scheme will be 8.7% instead of the current rate of 8.3%. The interest is paid quarterly. Interest on savings deposits, however, has been retained at 4% annually. Public Provident Fund (PPF) and National Savings Certificate (NSC) will fetch an annual interest rate of 8% in place of the existing 7.6% and Kisan Vikas Patra (KVP) will yield 7.7%  but will now mature in 112 months instead of 111. KVP’s current interest rate is 7.3%.

The girl child savings scheme Sukanya Samriddhi will offer 8.5% instead of 8.1%. Term deposits of 1-5 years will fetch the interest rate of 6.9 to 7.8% while the five-year recurring deposit will pay an interest of 7.3% instead of 6.9%.

The rates of small savings schemes are linked to government bond yields. The move is expected to see banks hiking their deposit rates in line with the small savings rate offered by the government.

Edited by: Rishi Shrestha