Govt retains interest rate on small savings for Oct-Dec

Ahead of monetary policy review, the government today kept unchanged the interest rates on small savings schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi for October-December quarter.

"The rates of interest on various small savings scheme for the third quarter of the financial year 2017-18 starting October 1 shall remain unchanged from those notified for the second quarter of 2017-18," the Finance Ministry said in a release.

Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.

The Reserve Bank of India is scheduled to undertake monetary policy review on October 4.

Investments in the public provident fund (PPF) scheme will fetch annual rate of 7.8 per cent while Kisan Vikas Patra (KVP) investments will yield 7.5 per cent and mature in 115 months.

The one for girl child savings, Sukanya Samriddhi Account Scheme will offer 8.3 per cent annually. Similarly, the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent. The interest rate on the senior citizens scheme is paid quarterly.

On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis since April 1, 2016, the ministry said while notifying the rates for third quarter of financial year 2017- 18.

While announcing the quarterly setting of interest rates, the ministry had said the rates of small saving schemes would be linked to government bond yields.

The move is expected to prompt banks to lower the deposit rate in line with the small savings rate as offered by the government.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)