Govt Takes a U-Turn; No Change in Interest Rates on Small Savings Schemes, PPF, NSC
After issuing an order to reduce interest rates on small savings schemes that would have delivered a blow to savers who depend on these schemes for income and social security, the Union government had withdrawn the order issued on 31 March 2021. Finance minister Nirmala Sitharaman (FM) says, the orders were issued by oversight and would be withdrawn.
In a tweet, she says, "Interest rates of small savings schemes of government of India (GoI) shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e., rates that prevailed as of March 2021."
On Wednesday, the government reduced interest rates on small savings that would have taken place from 1 April 2021.
The interest on savings deposits was cut to 3.5% from 4% annually, while for public provident fund (PPF) it was reduced to 6.4% from 7.1%.
Similarly, quarterly interest on one-year time deposit was cut to 4.4% from 5.5%. The senior citizen savings schemes rate was reduced to 6.5% from 7.4%.
The interest rate on National Savings Certificate (NSC) was cut to 5.9% from 6.8%, Sukanya Samridhi Yojana to 6.9% from 7.6% and Kisan Vikas Patra to 6.2% from 6.9%.
However, with the clarification from the FM, there would be no change in interest rates of small savings and they would continue as they were.