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Govt keeps interest rate unchanged on small savings schemes for Q3

The Reserve Bank of India is scheduled to undertake monetary policy review on October 4

Press Trust of India  |  New Delhi 

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Ahead of monetary policy review, the government on Friday kept unchanged the on small savings schemes like PPF, and for October-December quarter.

"The rates of interest on various small savings scheme for the third quarter of the financial year 2017-18 starting October 1 shall remain unchanged from those notified for the second quarter of 2017-18," the Finance Ministry said in a release.

Since April last year, of all small have been recalibrated on a quarterly basis.

The of India is scheduled to undertake monetary policy review on October 4.

Investments in the (PPF) scheme will fetch annual rate of 7.8 per cent while (KVP) investments will yield 7.5 per cent and mature in 115 months.

The one for girl child savings, Account Scheme will offer 8.3 per cent annually. Similarly, the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent. The interest rate on the senior citizens scheme is paid quarterly.

On the basis of the decision of the government, for small savings schemes are to be notified on a quarterly basis since April 1, 2016, the ministry said while notifying the rates for third quarter of the financial year 2017- 18.

While announcing the quarterly setting of interest rates, the ministry had said the rates of small would be linked to government bond yields.

The move is expected to prompt banks to lower the deposit rate in line with the small savings rate as offered by the government.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, September 29 2017. 22:21 IST