Today Finance Minister Nirmala Sitaraman Twwets that Interest rates on Small Savings Schemes will be as per the previous Interest rates. No Interesr will be declined.
Yesterday Finance Ministry told that Interest Rates on all small savings schemes will reduced. This demotivates small investors and they start thinking to move into equity market.
Interest rate on all Small Savings Scheme declines.
| Savings Scheme Name | Rate decided by the Finance Ministry for Quarter 1 of FY 21-22.(in %) | Rate after the tweet of Nirmala Sitaraman (in %) |
| Savings Deposit | 3.5 | 4.0 |
| 1 Year Time Deposit | 4.4 | 5.5 |
| 2 Year Time Deposit | 5.0 | 5.5 |
| 3 Year Time Deposit | 5.1 | 5.5 |
| 5 Year Time Deposit | 5.8 | 6.7 |
| 5 Year Recuuring Deposit | 5.3 | 5.8 |
| Senior Citizen Savings Scheme | 6.5 | 7.4 |
| Monthly Income Account | 5.7 | 6.6 |
| National Savings Certificate | 5.9 | 6.8 |
| Public Provident Fund | 6.4 | 7.1 |
| Kisan Vikas Patra | 6.2 ( Mature in 138 Months) | 6.9(Mature in 124 Months) |
| Sukanya Samridhi Account Scheme | 6.9 | 7.6 |
As you can see With the decline in Interest Rate of 70 basis points, maturity Time of Kisan Vikas Patra Extends to 14 Months.
If FM Minister approves these Decline rates than major Effect will be to PPF invetsors. Interest Receives on PPF is Anually Compunded and reduction of 70 basis points will effect very much after 15 years.
FM has taken the good decision and we all appreciate that.