Interest rates for post office savings schemes cut

Millions of small savers and PPF account holders would be earning less on their post office savings schemes, with the government deciding to reduce interest rates on them marginally by 0.10 per cent.

 

The interest rate of Public Provident Fund (PPF) has been lowered from 8.8 per cent to 8.7 per cent with effect from April 1, said a Finance Ministry statement. However, the rates on savings deposit schemes and fixed deposits up to one year operated by the post offices have been kept unchanged at 4 per cent and 8.2 per cent, respectively.

 

Further, Monthly Income Schemes (MIS) of 5-year maturity will earn an interest of 8.4 per cent.

 

The National Savings Certificates (NSC) having maturity offive and 10 years will now attract 8.5 per cent and 8.8 per cent interest respectively, down 0.10 per cent each. The interest rates would be applicable for the entire 2013-14 fiscal.

 

The rate for senior citizens savings scheme (SCSS) has been fixed at 9.2 per cent, down from 9.3 per cent.

 

The revision in interest rates follows a decision taken by government last year to link the small savings returns with the market rate. The new rates are required to be announced at the beginning of a financial year.

 

The decision was in line with the recommendations of Shyamala Gopinath Committee, which had suggested that returns should be in sync with market rates determined by the returns offered by other securities.