PPF, NSC and other Small savings interest rate may see moderation next quarter
The government recently changed a few rules for PPF accounts, NSC and other small savings schemes for the benefit of account holders. Atanu Chakraborty, Department of Economic Affairs Secretary said that at present, India has about 114 lakh crores in bank deposits and about 12 lakh crores are in small savings schemes.
The bank’s liabilities are being affected by these 12 lakh crores. He also said that the government is not dependent on PPF, NSC and other small savings schemes.
The government of India refrained from cutting interest rates on small savings schemes, including Kisan Vikas Patra (KVP), National Savings Certificate (NSC), Public Provident Fund (PPF) and bank deposit rates.
Small savings schemes Interest rates are revised each quarter depending on the yield on government securities.
The small saving schemes interest rate should be linked to market rates, which are largely influenced by government securities. Senior Citizen Savings Scheme and the girl child savings scheme Sukanya Samriddhi Account continue to provide higher interest rates than other small savings schemes.
The Senior Citizens Savings Scheme (five-year) will also continue to offer a 8.6% interest rate. Sukanya Samriddhi Account will continue to offer 8.4%. Kisan Vikas Patra (KVP) will continue to offer 7.6% interest rate.
Monthly Income Scheme (MIS), five-year Post Office saving scheme will continue to offer 7.6%. According to analysts, for a conservative investor, Public Provident Fund (PPF), National Savings Certificate (NSC), and other small savings schemes like Senior Citizen Savings Scheme and the girl child savings scheme Sukanya Samriddhi Account offer good returns.