Amid coronavirus lockdown, the Union Govt on Tuesday announced an interest rate cuts on small savings schemes for the first quarter (April to June) of Financial Year 2020-21.As per information, interest rates on Small Savings like Public Provident Fund (PPF), Kisan Vikas Patra, National Savings Certificate (NSC), Senior Citizens Scheme, Monthly Income Scheme have been reduced.
The Public Provident Fund (PPF) and Sukanya Samriddhi Yojana rate has been cut by 0.8 per cent or 80 bps each and it will now get a 7.1 per cent. Senior Citizens Scheme will get 7.4 per cent (interest cut by 1.2 per cent), Monthly Income Scheme will get 6.6 per cent (cut by 1 per cent)while NSC will get an interest of 6.8 per cent (cut by 1.1 per cent) for the April-June quarter.
Accordingly, post office time deposits of certain tenors have seen the sharpest cut of 1.4 per cent or 140 bps.Earlier,the interest rates on small savings schemes (except for post office savings account) were last revised in July 2019. With the PO interest rate lower than before, the FD rates in banks are also expected to fall further down.
The post office small savings investments such as National Savings Certificates (NSC), KVP, Time-deposits, Public Provident Fund (PPF), Senior Citizens Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY) etc. are hugely popular amongst the investors looking for safe and fixed returns.