Small savings schemes to fetch lower interest rates

Our Bureau. New Delhi | Updated on March 31, 2021

Rates reduced up to 90 basis points

The Finance Ministry, on Wednesday, announced the lowering of interest rates on various small saving schemes such as National Saving Certificates (NSC) and Public Provident Fund (PPF) in the range of 50 basis points to 90 basis points.

The new rate will come into effect from April 1 and will be valid till June 30. Contributions made on or after April 1 will fetch a lower rate, while those made till March 31 will get old rates.


The small savings schemes basket comprises 12 instruments, including the National Saving Certificate (NSC), Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and Sukanya Samridihi Scheme. The government resets the interest rate at the beginning of every quarter. Theoretically, since 2016, interest-rate resetting has been done based on yields of government securities of the corresponding maturity, with some spread on the scheme for senior citizens, as advised by the Shyamala Gopinath Committee. However, in practice, the interest rate changes are made considering several other factors, including political ones.


Published on March 31, 2021

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