The Hindu Business Line : Scindia seeks hike in interest rates of small savings schemes

The Minister of State for Communications and IT, Mr Jyotiraditya Scindia, has shot-off a letter to the Finance Minister seeking an upward revision in interest rates of small savings schemes, to arrest the decline in deposits for post office small savings schemes.

The Minister is learnt to have pointed out that although the Finance Ministry had recently taken certain steps such as restoration of five per cent bonus on MIS, tax benefit on investment in five-year time deposit and senior citizen savings scheme, “these are insufficient to attract deposits in post office small savings schemes.”

He further said that the main cause of concern was the present interest rates due to which investors of these schemes were facing financial loss.

“Unless interest rates of small saving schemes are revised upwards, there may not be any change in the present situation due to which post office small savings schemes would keep losing their attractiveness rapidly,” it said.

While there is not much difference in rates in case of saving deposit, for Postal Time Deposit Saving Scheme, the rates are currently pegged at 6.25 per cent for one year and 7.5 per cent for five years; the same in case of banks is 8.5-8.75 for one year and 9 per cent for five years.

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