Sharp cut in interest rates on small savings schemes

One of the sharpest cuts was seen in the term deposit schemes, with interest rate on a one-year time deposit being reduced from 5.5% to 4.4%. The returns on the five-year time deposit will fall from 6.7% in January-March to 5.8% in April-June.

The interest rate on the Public Provident Fund scheme savings have been reduced to 6.4% from 7.1% during this period. With this, the interest rate on PPF stand at a 46-year-low. From April 1, the interest rate on National Savings Certificate would be 5.9%, down from 6.8% earlier. The returns on Senior Citizen Savings Scheme would be at 6.5% against 7.4% earlier, and on savings deposit it will be 3.5%, compared to 4% at present. Interest rates for small savings schemes are notified on a quarterly basis.