Govt slashes interest rates on small savings, then withdraws order
In the government's earlier order, the interest rate of the savings deposit were brought down to 3.5 from its earlier 4.0 per cent.
The finance ministry has withdrawn its order to slash the interest rates of small saving schemes, which include public provident fund scheme as well, from April 1. These rates remained unchanged for the last three quarters as well.
The announcement was made by Union finance minister Nirmala Sitharaman on Twitter.
According to the now cancelled order, the interest rate of the savings deposit were brought down to 3.5 from 4.0 per cent. For the first time, the interest rate on savings deposits was reduced by 0.5 per cent to 3.5 per cent from the existing 4 per cent annually.
The rate of interest of the PPF scheme was to be 6.4 per cent annually. In the last quarter, it was 7.1. This would also have been the first time since 1974 that the PPF interest was brought down below 7 per cent.
The government's earlier order reduced the rate of 1-year time deposit to 4.4 per cent from 5.5 per cent. The interest of two-year time deport was reduced to 5 per cent from 5.5 per cent, three-year time deposit 5.1 per cent from 5.5 per cent, five-year time deposit 5,8 per cent from 6.7 per cent, five-year recurring deposit 5.3 per cent from 5.8 per cent.
The interest rate of the senior citizen savings scheme was revised to 6.5 per cent (quarterly and paid) from its previous 7.4 per cent. National Savings Certificate interest was reduced to 5.9 per cent from 6.8 per cent.
(With agency inputs)
