New Delhi: The government on Thursday rolled back interest rate cuts announced on small savings schemes including the popular Public Provident Fund (PPF), National Savings Certificate (NSC), announced last evening.
“Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021,” the Finance Ministry tweeted today morning.
“Orders issued by oversight shall be withdrawn,” she further added.
Last evening (March 31), the last day of the previous financial year, the government had slashed interest rates on small savings schemes. According to the circular issued by the Finance Ministry, the rates of small savings schemes were reduced by 50-100 basis points.
According to that order interest rate on PPF was cut to 6.4% from 7.1%, while rates on Senior Citizen Savings Schemes, Monthly Income Account, National Savings Certificate, Kisan Vikas Patra were slashed to 6.5%, 5.7%, 5.9%, 6.2% respectively. These rates were supposed to be applicable from today. The new interest rates would have been the lowest since 1974.
Worth mentioning here is that interest rates on small savings schemes are revised every quarter. The above interest rate cuts were announced after three-quarters of status quo. Earlier, interest rates on small savings schemes were reduced by a big margin in the first quarter of the financial year 2021-22.
However, the latest order from the finance ministry comes as a big relief for savers and senior citizens who mainly depend on the interest income from these schemes for earning a regular income. The rollback was announced as two states-Bengal and Assam voted in the second round of the state elections.