On Thursday, the government kept interest rates on small savings plans, including the PPF and NSC, unchanged for the January-March quarter amid moderating bank deposit rates. The public provident fund (PPF) and the national savings certificate (NSC) will continue to carry an annual interest rate of 7.1% and 6.8%, respectively.
The interest rates for small savings plans are notified by the Ministry of Finance on a quarterly basis. “Interest rates on various small savings plans for the fourth quarter 2020-2021 ending March 31 will remain unchanged from those notified for the third quarter (October 1-December 31, 2020),” the ministry said. in a notification.
As a result, the five-year senior savings plan’s interest rate has been maintained at 7.4%. The interests of the senior citizens’ scheme are paid quarterly. The interest rate on savings deposits has been maintained at 4 percent per annum. The Sukanya Samriddhi Yojana savings program for girls will offer a rate of 7.6% in the fourth quarter of the current fiscal year.
The annual interest rate of the Kisan Vikas Patra (KVP) was kept at 6.9 percent. One- to five-year term deposits will earn an interest rate in the range of 5.5-6.7%, payable quarterly, while the interest rate on five-year recurring deposits is fixed. at 5.8%.
The low savings rates unchanged for the fourth quarter of fiscal 2021 should help the central government to mobilize additional resources in this direction, said ICRA senior economist Aditi Nayar. This will help prevent a review of its dated borrowing schedule for the fourth quarter of fiscal 2021, despite the sharp widening of the budget deficit forecast for the current fiscal year, she added.