The Ministry of Finance on Wednesday announced the reduction in the small savings rate from 3.5 percent 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 said that the 1-year time deposit rates have been reduced to 4.4 percent from 5.5 percent, and the 2-year, 3-year, 5-year time deposit rate have 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 has been cut to 5.3 per cent from the previous 5.8 per cent.
Post the decision Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate would fetch a savings rate of 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 has been decreased to 6.2 per cent.