On Wednesday, the government has given relief to the savers, it has announced that the government would keep interest rates on small saving schemes, like PPF and NCF, unchanged during the second half of the Financial year (FY) 2021-2022. This decision has been taken by keeping the pandemic situation in the country in mind.
Currently, the Public Provident Fund (PPF) and the National Savings Certificate (NSC) carry an annual rate of 7.1 per cent and 6.8 per cent, respectively, and would carry the same in the second half as well.
On Wednesday, the finance ministry has released a notification, which read, “The rates of interest on various small savings schemes for the second quarter of the financial year 2021-22 starting from July 1, 2021, and ending on September 30, 2021, shall remain unchanged from the current rates applicable for the first quarter (April 1, 2021, to June 30, 2021) for FY 2021-22.”
Highlights of the announcement on Wednesday (for Q-2 of FY 2021-2022):
On April 1, on the small saving schemes, the central government has swiftly revoked a steep interest rate cut of up to 1.1 percent for the first quarter, citing oversight. At that time, the interest rates on the small saving scheme were slashed by 70-140 basis points in the April-June 2020 period.
This order was withdrawn overnight by Union Finance Minister Nirmala Sitharaman, who stated that the notification was sent ‘erroneously’.
The interest rate for the small saving schemes is notified every quarter.