New Delhi, March 31 (IANS) The government on Friday lowered the interest rate on small savings schemes, including Public Provident Fund (PPF), by 0.1 per cent for April 1-June 30 period.
Accordingly, interest rates for small savings schemes are to be notified on quarterly basis.
"The government has announced revised rates of interest on various small savings schemes for the first quarter of the financial year 2017-18.
"To bring such rates somewhat closer to market rates, the government has decided to effect a reduction of 0.1 percentage point (10 basis points) in interest rates across the board in all the schemes except the Post Office Savings Account, which has been left untouched," the Finance Ministry said here in a statement.
For the April-June quarter, the interest rate on PPF has been reduced to 7.9 per cent from the earlier 8 per cent.
"The current revision of rates is reflective of the government's commitment to calibrated reform in the financial sector to ensure better interest rate transmission," the statement said.
Interest rate on Kisan Vikas Patra has been reduced to 7.6 per cent (which will mature in 113 months) from the earlier 7.7 per cent (with maturity in 112 months).
The Sukanya Samriddhi Account Yojana interest rate has been reduced to 8.4 per cent from the earlier 8.5 per cent.
The interest rates on five-year Recurring Deposit, Senior Citizens Savings Scheme, Monthly Income Scheme and National Savings Certificate have also been reduced by 0.1 per cent each.
"Certainly, senior citizens and pensioners, who depend heavily on interest income, will be the affected lot," chartered accountant Pritam Mahure told IANS.
Only the interest on savings deposits has been retained at 4 per cent.
Interest on one-year, two-year, three-year and five-year time deposit has also been lowered by 0.1 per cent each.