The Reserve Bank of India (RBI) on Thursday notified 0.1 percent reduction each in interest rates on Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS) to be effective from fiscal beginning April 1, 2013.
The Reserve Bank of India (RBI) on Thursday notified 0.1 percent reduction each in interest rates on Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS) to be effective from fiscal beginning April 1, 2013. The rate of interest on PPF has been lowered from 8.8 percent to 8.7 per cent with effect from April 1, 2013, RBI said in a notification.
The rate of interest on 5-year SCSS has been reduced to 9.2 percent from 9.3 percent for entire 2013-14 fiscal, it said. RBI said the new rates will come into force from April 1, 2013 following government's memorandum on March 25, 2013 which advised rate of interest on various small savings schemes for the financial year 2013-14. RBI said banks should bring this content to the notice of their branches operating PPF and SCSS accounts. It also said the new rates should also be displayed on the notice boards of their branches for information of the PPF and SCSS subscribers.
Following the government's decision earlier this week, millions of small savers and PPF account holders will earn less on their post office savings schemes. However, government kept unchanged rates on savings on deposit schemes and on fixed deposit of up to one year run by post offices at 4 percent and 8.2 percent respectively. Further, post office Monthly Income Schemes (MIS) of 5-year maturity will earn an interest of 8.4 per cent. The National Savings Certificates (NSC) having maturity of five and 10 years will attract 8.5 percent and 8.8 percent interest respectively, down 0.10 percent each. Revision in interest rates follows a decision taken by government last year to link small savings returns with market rate. The decision is in line with the recommendations of Shyamala Gopinath Committee, which had suggested that returns should be in sync with market rates determined by the returns offered by other securities.