July-Sept quarter – Interest Rate for Small Saving Schemes May Remain Unchanged
The government is likely to keep the interest Rates on small savings schemes for the July-October quarter unchanged.
The Times of India reported that amid protests from individuals who depend on public provident fund and post office deposits to meet their financial needs, the Finance Ministry is likely to hit the pause button on rate revision for the next quarter.
The government is expected to notify the rates this week, added the report.
Instead of annual resetting of interest rates for small saving schemes, such as PPF, Kisan Vikas Patras, various post office schemes and Senior Citizens Savings Scheme, in 2016-17, it was decided by the government that interest rates for these schemes will be reset every quarter based on the G-Sec yields of the previous three months.
During the current quarter, the average yield on government securities has come down to around 7.5%, which would have resulted in PPF rates falling to under 8% from 8.1% at present, report added.
The government may opt to keep the rates unchanged as inflation is seen going up and prices of vegetables and pulses have gone up.