Interest rates on small savings schemes, including NSC and PPF, were kept unchanged for the fourth quarter of 2021-22 on Friday amid rising cases of the more contagious coronavirus variant Omicron and higher inflation levels.
public provident Fund (PPF) and National Savings Certificate (NSC) will continue to offer an annual interest rate of 7.1% and 6.8%, respectively, in the fourth quarter as well.
“The rates of interest on various small savings schemes for the third quarter of the financial year 2021-22 starting from January 1, 2022 and ending on March 31, 2022 will remain unchanged from the current rates applicable for the third quarter (October). 2021 to December 31, 2021) for the financial year 2021-22,” the finance ministry said in a notification.
The decision comes ahead of next year’s assembly elections in five states – Uttar Pradesh, Uttarakhand, Punjab, Himachal Pradesh and Goa. According to analysts, the decision to retain the rates has been taken by the Center in view of this. PTI,
Uttar Pradesh is the second largest contributor to the small savings scheme after West Bengal.
Earlier this year, during the West Bengal assembly elections, the Center had decided to reduce the interest rate. But the Finance Ministry immediately canceled the interest rate cut of up to 1.1% for the first quarter on small savings schemes, citing oversight.
Consequently, the first quarter rates were maintained at the level of the fourth quarter of the previous financial year. The cut was seen as the sharpest cut in several decades.
Interest rates for small savings schemes are notified on a quarterly basis.
The one-year fixed deposit scheme will continue to earn an interest rate of 5.5% during the second quarter of the current financial year, while the girl child savings scheme Sukanya Samriddhi Yojana account will earn 7.6%.
The interest rate on the five-year Senior Citizens Savings Scheme will be retained at 7.4%. Interest on the Senior Citizens Scheme is paid quarterly.
The interest rate on savings deposits will remain at 4% per annum.
Fixed deposits of one to five years will fetch an interest rate in the range of 5.5-6.7%, which will be paid quarterly, while the interest rate on recurring deposits of five years will earn a higher interest rate of 5.8%.
With inputs from agencies.
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