Interest rates on small savings schemes cut marginally

PPF will fetch an interest rate of eight per cent in the third quarter of the current FY, against 8.1 per cent in the previous quarter

Interest rates on small saving schemes would be reduced marginally by 0.1 percentage points for the December quarter of 2016-17, leading to lower returns on Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and Sukanya Samriddhi Account, among others.

PPF will fetch an interest rate of eight per cent in the third quarter of the current financial year, against 8.1 per cent in the previous three-month period, according to new interest rates announced by the finance ministry on Thursday.

The interest rate on KVP has been brought down to 7.7 per cent from 7.8 per cent. KVP will now mature in 112 months instead of 110 months. The rate of interest for the third quarter for 5-year Senior Citizens’ Savings Scheme and 5-year National Savings Certificate will be reduced to 8.5 per cent and 8 per cent, respectively.

The Sukanya Samriddhi Account Scheme, for the girl child, will now fetch 8.5 per cent interest rate, against 8.6 per cent in the July-September quarter.

The Interest rate on 1-, 2-, 3-, 4- and 5-year time deposits, too, would be reduced by 0.1 per cent.

Depositors will get an interest rate of 7.3 per cent on five-year recurring deposits during the quarter beginning October 1 as against 7.4 per cent they were getting in the second quarter.

The interest rate on savings deposits will, however, be kept unchanged at four per cent.