Government keeps small savings rates for Q3 unchanged

NEW DELHI: The central government has decided to keep the interest rate of PPF, NSC and other small savings schemes unchanged at least for the next three months till December this year.

This means that the interest rate on PPF (Public Provident Fund) remains at 7.1% per annum while for the senior citizen savings scheme, the interest rate will remain at 7.4% per annum, Sukanya Samriddhi account holders will continue to get 7.6% compounded annually on their account balance.

The 5-year monthly income account scheme is offering 6.6% payable monthly, while the 5-year NSC (National Saving Certificate) continues to offer 6.8% compounded annually. So the investors in post office small savings schemes, senior citizens can heave a sigh of relief as these schemes could continue to be attractive compared to bank fixed deposits.

Technically, interest rate resetting has been done based on yields of government securities, as advised by the Shyamala Gopinath Committee. However, it always remains a politically sensitive issue. Currently, most leading banks are offering interest rates of around 5.5% over 1 to 10-year deposits.