The central government said on Wednesday that interest rates on small savings would remain unchanged for the second quarter of the current fiscal year. The announcement is made three months after the Centre takes off big cuts in small savings interest rate.
With the government holding fast to the interest rates on savings schemes, considered favorites of the ‘Aam Aadmi’, the small savings instruments will continue getting higher returns compared to bank deposit rates.
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However, according to the announcement made on Wednesday: (For Q-2 of FY2021-22), the interest rates are as followed:
- Return on five-year deposit: 6.7 per cent
- Rate on 12 months’ deposit: 5.5 per cent
- National Savings Certificate (NSC) rate: 6.8 per cent
- Interest on senior citizens savings scheme: 7.4 per cent
- Interest on savings deposit for senior citizens: 4 per cent
- Interest on Sukanya Samriddhi account scheme: 7.6 per cent
- Interest on Public Provident Fund (PPF) scheme savings: 7.1 per cent
In the month of April, the government announced the steep cuts in interest rates for small savings schemes, which include NSC and PPF. Interest rates on small savings schemes were then reduced by 70-140 basis points in the April-June 2020 period.