In the new financial year starting from April 1, the finance ministry has decided to slash the interest rates of small saving schemes, which include public provident fund scheme as well. These rates remained unchanged for the last three quarters.
The interest rate of the savings deposit has been brought down to 3.5 from itsearlier 4.0 per cent. The rate of interest of the PPF scheme will be 6.4 per cent annually. In the last quarter, it was 7.1. This is the first time since 1974 that the PPF interest has been brought down below 7 per cent.
The rate of 1-year time deposit has been reduced to 4.4 per cent from 5.5 per cent. The interest of two-year time deport has been reduced to 5 per cent from 5.5 per cent three year time deposit 5.1 per cent from 5.5 per cent, five-year time deposit 5,8 per cent from 6.7 per cent, five-year recurring deposit 5.3 per cent from 5.8 per cent.
The interest rate of the senior citizen savings scheme has been revised to 6.5 per cent (quarterly and paid) from its previous 7.4 per cent. National Savings Certificate interest has been reduced to 5.9 per cent from 6.8 per cent.