Interest rate cut on small savings rolled back

New Delhi: The decision of the Central Government regarding reduction of interest rates on small savings has been rolled back.

“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,” tweeted Finance Minister Nirmala Sitharaman today.

“Orders issued by oversight shall be withdrawn,” she added.

In a decision, which would have delivered a blow to savers who depend on small savings schemes for income and social security, the Ministry of Finance on Wednesday announced the reduction in the small savings rate to 3.5 per cent for the first quarter of the financial year starting April 1, 2021.

The small savings rate during January-March was 4 per cent annually.

Further, in an office memorandum, the Department of Economic Affairs had said that the 1-year time deposit rates has been reduced to 4.4 per cent from 5.5 per cent, and the 2-year, 3-year, 5-year time deposit rate have been cut to 5.0 per cent, 5.1 per cent and 5.8 per cent, respectively, on a quarterly basis.

The 5-year recurring deposit was cut to 5.3 per cent from the previous 5.8 per cent.

Interest rates on Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate were cut to 6.4 per cent, 6.9 per cent and 5.9 per cent, respectively on an annual basis. The interest rate on Kisan Vikas Patra was decreased to 6.2 per cent.

Now, these changes have been reverted post the government’s decision to withdraw the order.

(with IANS inputs)