The government today announced a steep cut in the interest rates on small savings schemes for the first quarter (April to June) of FY 2020-21. Interest rates on various small savings schemes have been cut by between 70 basis points and 140 basis points (100 basis points = 1 per cent).
For instance, interest rates on the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana have been cut by 0.8% or 80 bps, each. Post office time deposits (of certain tenors) have seen the sharpest cut of 1.4 per cent or 140 bps. After the latest reduction, the PPF will earn 7.1 per cent (down from 7.9 per cent), Sukanya Samriddhi Yojana 7.6 per cent (8.4 per cent), and the time deposits will earn 5.5-6.7 per cent for the April-June quarter.
Here is a look how much each of the small savings schemes will earn for the quarter ending June 30, 2020.
% change in Small Savings schemes interest rates
|Instrument||Interest rate (%) from Jan 1, 2020||Interest rate (%) from April 1, 2020||Change(%)|
|1 year Time Deposit||6.9||5.5||-1.4|
|2 year Time Deposit||6.9||5.5||-1.4|
|3 year Time Deposit||6.9||5.5||-1.4|
|5 year Time Deposit||7.7||6.7||-1|
|5 year Recurring Deposit||7.2||5.8||-1.4|
|5 year Senior Citizen Savings Scheme||8.6||7.4||-1.2|
|5 year Monthly Income Account||7.6||6.6||-1|
|5 year National Savings Certificate||7.9||6.8||-1.1|
|Public Provident Fund||7.9||7.1||-0.8|
|Kisan Vikas Patra||7.6||6.9||-0.7|
|Sukanya Samriddhi Yojana||8.4||7.6||-0.8|