The Ministry of Finance on March 31 announced a cut in small savings deposit rate from 4 percent to 3.5 percent for the first quarter of the financial year starting April 1, 2021.
One-year time deposit rates are cut to 4.4 percent from 5.5 percent, 2-, 3-, 5- and 5-year recurring deposit rates are cut to 5 percent, 5.1 percent, 5.8 percent and 5.3 percent, from 5.5 percent, 5. 5 percent, 6.7 percent and 5.8 percent, respectively, the ministry said.
Senior Citizen Savings Schemes interest rates are also reduced to 6.5 percent from 7.4 percent.
The ministry further said Public Provident Fund Scheme interest rates are cut to 6.4 percent from the earlier rate of 7.1 percent while Kisan Vikas Patra will see interest rates reducing to 6.2 percent from 6.9 percent earlier.
Interest rate for Sukanya Samriddhi Account Scheme has been slashed to 6.9 percent from 7.6 percent.
These interest rate cuts are in-line with overall interest rate movement in financial system. When bank lending deposit rates fall sharply, small savings rates have to follow to align with the larger trend.
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