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The Finance Ministry on Thursday announced that interest rates on small saving schemes for three months period starting October 1 will remain unchanged. This means interest rates on various small saving schemes such as National Saving Certificates (NSC), Public Provident Fund (PPF) will continue for at least three more months starting Friday.
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.
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