New Delhi, Sep 20: The government on Thursday announced the Revision of interest rates for Small Savings Schemes for the Third Quarter of 2018-19. The interest rates of small savings schemes including National Savings Certificate (NSC), Public Provident Fund (PPF) have been hiked by up to 0.4 per cent while the girl child savings scheme Sukanya Samriddhi account will earn an interest rate of 8.5 per cent rate for the October-December quarter. On the basis of the decision of the Government, the interest rates for Small Savings Schemes are to be notified on Quarterly Basis with the approval of the Union Finance Minister.

Reports inform that the decision is expected to see banks lowering their deposit rates in line with the small savings rate offered by the government. Under the revised rates, the interest on savings deposits has been retained at 4 per cent, annually while that of term deposits, NSC, PPF, KVP and Sukanya Samriddhi Scheme are compounded on an annual basis. Vijaya Bank, Dena Bank, Bank of Baroda to be Merged: What Will Happen to Cheque Book, Passbook and Account Number of Depositors.

The Rates of Interest on the basis of the interest compounding/payment built-in in the Schemes:

Instrument Rate of interest w.r.t. 01.07.2018 to 30.09.2018 Rate of interest w.r.t. 01.10.2018 to 31.12.2018 Compounding frequency
Savings Deposit 4 4 Annually
1 Year Time Deposit 6.6 6.9 Quarterly
2 Year Time Deposit 6.7 7 Quarterly
3 Year Time Deposit 6.9 7.2 Quarterly
5 Year Time Deposit 7.4 7.8 Quarterly
5 Year Recurring Deposit 6.9 7.3 Quarterly
5 Year Senior Citizen Savings Scheme 8.3 8.7 Quarterly and paid
5 Year Monthly Income Account 7.3 7.7 Monthly and paid
5 Year National Savings Certificate 7.6 8 Annually
Public Provident Fund Scheme 7.6 8 Annually
Kisan Vikas Patra 7.3 (will mature in 118 months) 7.7 (will mature in 112 months) Annually
Sukanya Samriddhi Account Scheme 8.1 8.5 Annually
(Source: Ministry of Finance)

The interest rate for the five-year term deposit, recurring deposit Senior Citizens Savings Scheme has been raised to 7.8, 7.3 and 8.7 per cent, respectively. With the new rates in place from October, the PPF and NSC will now bring annual interest rate of 8 per cent as compared to existing 7.6 per cent. Aadhaar Delinked From Widow, Old Age Pension in Delhi, Senior Citizens Rejoice.

The Finance Ministry circular stated that the interest rates of various small saving schemes have been hiked by between 30 basis points and 40 basis points. (One percentage point is equivalent to 100 basis points.) The Centre has hiked the interest rate of Small saving deposit of 1-3 year time period by 30 basis points and deposit of 5 year time period by 40 basis points. Meanwhile, the interest rate on the post office savings account balance has been kept unchanged at 4 per cent.

(The above story first appeared on LatestLY on Sep 20, 2018 12:06 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).