The finance ministry has retained the interest rate on small savings schemes for the September quarter.
The scheme will continue to fetch small investors better rates than other constant income avenues such as bank constant deposits (FDs).
As an example, the five-year constant deposit under Post Office Savings Scheme offers a 6.7 per cent interest rate. Top banks in the country offer 5.4-5.5 per cent interest rates on a constant deposit of the same tenure.
Many were keenly waiting for the announcement after the events that occurred final quarter. Towards March-end, the government had announced a cut in small savings scheme rates — the rates for Public Provident Fund (PPF) were reduced by 0.7 per cent to 6.4 per cent, and for National Savings Certificate (NSC) were revised downwards by 0.9 per cent.
On the other hand, the next day to come, the finance minister said that earlier notification on rate cuts was once an “oversight”, and the rates remain unchanged.
“Interest rates of small savings schemes of GoI (Government of India) shall continue to be at the rates which existed in the final quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn,” Finance Minister Nirmala Sitharaman had posted on Twitter.
The events happened around the time some states (including West Bengal, Assam, Tamil Nadu and Kerala) were either going for polls or elections were underway.
Interest rates on small savings schemes have remained unchanged since April 1, 2020, even supposing rates have been falling on other traditional constant income products like bank and company FDs.
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