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Centre Withdraws Cut In Small Savings Interest Rate
Just a day after announcing rate cut on post office schemes, the centre on Thursday rolled back the cut. The announcement was made by Finance Minister Sitharaman.
So, the various small savings scheme will fetch return as applicable in the last quarter of FY21.
"Interest rates of small savings schemes of government of India shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn," tweeted the Finance Minister.
On the various schemes the rate cut announced on Wednesday was substantial. For instance savings account rate was reduced to 3.5% from 4%. SSY rate was reduced to 6.9% from 7.6%.
For schemes with quarterly compounding frequency, the interest of one-year time deposit was reduced to 4.4 per cent from 5.5 per cent. For two-year time deposit scheme, the interest was lowered from 5.5 per cent to 5.0 per cent. Interest for three-year time deposit scheme was reduced from 5.5 per cent to 5.1 per cent, and five-year time deposit scheme from 6.7 per cent to 5.8 per cent.
For the five-year recurring deposit, the interest was reduced from 5.8 to 5.3 per cent.
| Small Saving Scheme | Revised lower rate announced for April-June quarter of FY22 | Rates that would remain for April-June quarter |
|---|---|---|
| Savings account | 3.5% | 4% |
| 1-year time deposit | 4.4% | 5.5% |
| 2-year time deposit | 5% | 5.5% |
| 3-year time deposit | 5.1% | 5.5% |
| 5-year time deposit | 5.8% | 6.7% |
| 5-year RD | 5.3% | 5.8% |
| Senior citizen savings scheme | 6.5% | 7.4% |
| PPF | 6.4% | 7.1% |
| Kisan Vikas Patra | 6.2% | 6.9% |
| Sukanya Samriddhi Account | 6.9% | 7.6% |
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