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Govt withdraws decision to lower small savings interest rates
New Delhi, April 1, 2021
The Union Goverment has withdrawn its decision to lower the small savings interest rates for the April-June quarter.
"Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e., rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn," Finance Minister Nirmala Sitharaman said on Twitter.
The rollback was announced amid second round of voting in the Assembly elections in West Bengal and Assam.
In a decision which would have delivered a blow to savers who depend on small savings schemes for income and social security, the Ministry of Finance on Wednesday announced the reduction in the small savings rate to 3.5 per cent for the first quarter of the financial year starting April 1, 2021.
The small savings rate during January-March was 4 per cent annually.
Further, in an office memorandum, the Department of Economic Affairs had said that the 1-year time deposit rates has been reduced to 4.4 per cent from 5.5 per cent, and the 2-year, 3-year, 5-year time deposit rates had been cut to 5.0 per cent, 5.1 per cent and 5.8 per cent, respectively, on a quarterly basis.
The 5-year recurring deposit was cut to 5.3 per cent from the previous 5.8 per cent.
Interest rates on Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate were cut to 6.4 per cent, 6.9 per cent and 5.9 per cent, respectively on an annual basis. The interest rate on Kisan Vikas Patra was decreased to 6.2 per cent.
Now, these changes have been reversed after the government's decision to withdraw the order.