New Delhi: The government on Wednesday decided not to tinker with the interest rates on small savings schemes, including National Savings Certificate (NSC) and Public Provident Fund (PPF), for the April-June quarter.
The move is aimed at matching the hardening interest rates in the banking sector.
“On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis," the finance ministry said while notifying the rates for the first quarter of financial year 2018-19.
“Accordingly, the rates of interest on various small savings schemes for the first quarter of financial year 2018-19 starting 1 April 2018 shall remain unchanged from those notified for the fourth quarter of financial year 2017-18," it said.
In another notification, the ministry said it has decided to extend submission of Aadhaar details for small savings scheme investors until further orders. Interest rate for the five-year Senior Citizens Savings Scheme has been retained at 8.3%. The interest rate on the senior citizens’ scheme is paid quarterly.
Interest on savings deposits has been retained at 4% annually. Public Provident Fund (PPF) and National Savings Certificate (NSC) will fetch annual interest rate of 7.6% while Kisan Vikas Patra (KVP) will yield 7.3% and mature in 11 months. The girl child savings scheme Sukanya Samriddhi Account will offer 8.1% rate. Term deposits of 1-5 years will fetch interest rate of 6.6-7.4%, to be paid quarterly, while the five-year recurring deposit is pegged at 6.9%.
While announcing the quarterly setting of interest rates in 2016, the finance ministry had said that rates of small savings schemes would be linked to government bond yields.
The move is expected to see banks lowering their deposit rates in line with the small savings rate offered by the government.
Regarding Aadhaar, the ministry said depositors were required to submit their Aadhaar number at the time of opening of account or purchasing certificates.
“Every depositor who had not given his Aadhaar number at the time of application for such deposit was required to submit his Aadhaar number on or before the 31 December 2017. Further, the date of submission of Aadhaar was extended... to 31 March 2018," it said.
It has now been decided to extend the last date for submission of Aadhaar number from 31 March 2018 until further orders.