Wud banks lower deposit rates?; as govt slashed interest rates on small savings schemes

investments in the five-year Senior Citizens Savings Scheme has been retained at 8.3 percent

Wud banks lower deposit rates?; as govt slashed interest rates on small savings schemes

In a move that might prompt the banks to lower deposit rates, the government today slashed interest rates on small savings schemes including NSC and PPF by 0.2 percentage point for the January-March period from the rates applicable in the previous quarter.

However, the investments in the five-year Senior Citizens Savings Scheme has been retained at 8.3 percent.

A finance ministry notification said rates have been reduced across the board for schemes such as National Savings Certificate (NSC), Sukanya Samriddhi Account, Kisan Vikas Patra (KVP) and Public Provident Fund (PPF).

However, interest on savings deposits has been retained at 4 percent annually.

Since April last year, interest rates on all small savings schemes have been recalibrated on a quarterly basis.

As per the notification, PPF and NSC will fetch a lower annual rate of 7.6 percent while KVP will yield 7.3 percent and mature in 11 months.

The girl child savings scheme Sukanya Samriddhi Account will offer 8.1 percent from existing 8.3 percent annually.

Term deposits of 1-5 years will fetch a lower interest rate of 6.6-7.4 per cent, to be paid quarterly, while the five-year recurring deposit is pegged at 6.9 percent.

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