Small Savings Schemes Rates: The government on Thursday did not change the interest rate on small savings schemes like Public Provident Fund (PPF) and National Savings Certificate (NSC) for the third quarter of 2021-22. The decision was taken amid the Kovid-19 pandemic and the rise in inflation rate. The annual interest rate on PPF and NSC will remain 7.1 percent and 6.8 percent respectively.
The Finance Ministry said in a notification, “The rates of interest on various small savings schemes will remain the same for the third quarter of 2021-22 (October 1, 2021 to December 31, 2021). That is, the interest rates which were there during the second quarter (June 1, 2021 to September 30, 2021) will remain the same.
This could be the political connection of not changing the rates
According to analysts, the upcoming assembly elections in Uttar Pradesh could be one of the main reasons behind the decision to keep interest rates unchanged. Uttar Pradesh is the largest contributor to small savings schemes after West Bengal. It is noteworthy that earlier this year, just before the assembly elections in West Bengal, it was decided to reduce the interest rates on small savings schemes. But the very next day, on April 1, the Finance Ministry quashed the decision of a huge cut of up to 1.1 percent.
Rate of Sukanya Yojana is 7.6%
As a result, the interest rate in the first quarter of 2021-22 remained in line with the interest rates of the fourth quarter of the previous financial year 2020-21. Interest rates on small savings schemes are notified on a quarterly basis. The interest on one-year fixed deposit will remain 5.5 percent, while the interest on the Sukanya Samriddhi Yojana (SSY Interest Rate) account, the savings scheme launched for the girl child, will get 7.6 percent as before.
The interest rate on the five-year Senior Citizens Savings Scheme has been retained at 7.4 per cent. At the same time, under the Senior Citizen Savings Scheme, interest is paid on a quarterly basis. Interest on savings deposits will continue to be available at 4 percent. The interest rates on fixed deposits for one year to five years will be 5.5 to 6.7 percent. Whereas interest on five-year recurring deposit will be given at 5.8 percent.