The government has lowered interest rates on small saving schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi scheme by 0.1 percent for the April-June quarter, a move that would prompt banks to cut their deposit rates.
For April-June, these have been lowered by 0.1 percent across the board compared to January-March. However, interest on savings deposits has been retained at 4 percent annually.
Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis. For the January-March quarter, these have been kept unchanged compared with the October-December quarter.
A finance ministry notification said investments in the public provident fund (PPF) scheme will fetch lower annual rate of 7.9 percent, the same as 5-year National Savings Certificate. The existing rate for these two schemes is 8 percent.
Kisan Vikas Patra (KVP) investments will yield 7.6 percent and mature in 112 months.
The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.4 percent annually, from 8.5 percent at present, while it will be the same at 8.4 percent for the 5-year Senior Citizens Savings Scheme. The interest rate on the senior citizens scheme is paid quarterly.
Term deposits of 1-5 years will fetch a lower 6.9-7.7 percent that will be paid quarterly while the 5-year recurring deposit has been pegged lower at 7.2 percent.