The move is especially expected to benefit small savers and senior citizens
The Finance Ministry has left unchanged interest rates on small savings schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY) and post office savings schemes.
The move is expected to benefit small savers and senior citizens.
In a circular dated September 30, it notified that FY20 interest rates for the October to December quarter would be same as that in the July to September quarter.
In the July-September quarter, rates were cut by 10 basis points (1 bps = 0.01 percent) on all schemes, except interest on savings account.
PPF will continue to offer 7.9 percent interest, Senior Citizens Savings Scheme (SCSS) 8.6 percent and post office time deposits between 6.9 percent and 7.7 percent.There were expectations that the government will cut interest rates (pegged at 25-100 bps above government bond yields of the same maturity) would be reduced as well. Banks cut fixed deposit rates in line with the Reserve Bank of India’s policy rate cuts.