Quarterly interest on some savings schemes from April

Interest rates on select National Small Savings (NSS) schemes will be recalibrated quarterly from April 1 to align them with market rates of the government securities, an official statement said on Tuesday.

"The 25 basis points (0.25 percent) spread on one-year, two-year and three-year term deposits, Kisan Vikas Patra Scheme (KVPS) and five-year recurring deposits will be removed to make them closer to interest rates paid on similar instruments by banks," said a finance ministry statement.

Interest on NSS schemes like Sukanya Samriddhi Yojana for senior citizens and the monthly income will, however, continue on the existing rates.

"Similarly, the 0.25 percent spread on long-term instruments like the five-year term deposit, five-year National Saving Certificates (NSC) and 15-year Public Provident Fund (PPF) have also been left untouched, as they are meant for self-employed and salaried classes," the statement clarified.

The biannual compound interest on 10-year NSC, though discontinued since December 20, 2015, the five-hear NSC and KVP will be on annual basis from April.

Interest rates applicable on various NSS schemes applicable for April-June quarter will be notified in March, it added.