New Delhi: The government has lowered interest rates by 0.1 per cent on small savings devices like Public Provident Fund (PPF), Kisan Vikas Patra, Sukanya Samriddhi Account and Senior Citizens Savings Scheme effective April 1, 2017, news agency Press Trust of India reported on Friday.
The popular Public Provident Fund or PPF will fetch an interest rate of 7.9 per cent starting April 1, 2017, down from 8 per cent. Similarly, the interest rate on Kisan Vikas Patra will come down to 7.6 per cent, Five-Year Senior Citizens Savings Scheme at 8.4 per cent and Five-Year National Savings Certificate at 7.9 per cent.
The reduction in interest rate comes in the wake of an overall decline in interest rate in the financial system. Retirement fund body Employees’ Provident Fund Organisation or EPFO had earlier decided to lower the interest on provident fund deposits for the current fiscal year to 8.65 per cent, from 8.8 provided in 2015-16, for its over four crore subscribers.
Currently, interest rates of small savings schemes are revised every quarter and are linked to yields on government bonds.
According to the formula given by the Shyamala Gopinath panel, the interest rates of small savings schemes are reset every quarter and are slightly higher than the government bond yield of previous three months.