Government lowers interest rates on PPF, Sukanya, Senior Citizen, other small saving schemes

Facing economic challenges due to threat posed by coronavirus, the government on Tuesday lowered the rates of interest on various small savings schemes including Public Provident Fund, Sukanya Samriddhi and Kisan Vikas Patra for the first quarter of the financial year 2020-21 starting from April 1.

However, the interest on savings deposit stays at 4 per cent.

According to an office memorandum of the Ministry of Finance, the rate of interest for Sukanya Samriddhi Account Scheme it has been reduced from 8.4 to 7.6 per cent.

The other schemes (with annual compounding frequency) for which interest has been reduced include Public Provident Fund (reduced from 7.9 to 7.1 per cent) and for National Savings Certificate (7.9 to 6.8 per cent).

For Kisan Kisan Vikas Patra it has been reduced from 7.6 per cent to 6.9 per cent. The KVP will mature in 124 months instead of 113 months earlier.

The rate of interest for the Senior Citizen Savings Scheme has been reduced to 7.4 from 8.6 per cent. For the monthly income scheme, it comes down to 6.6 per cent from 7.6 per cent.

For five-year recurring deposit, the interest has been reduced from 7.2 to 5.8 per cent. For five year time-deposit, it has been brought down from 7.7 per cent to 6.7 per cent and from 6.9 to 5.5 per cent for three-years, two-years and one-year time deposits.