On March 31, 2020, the Government of India lowered interest rates of several small savings scheme facing Economic challenges created by the threat of COVID-19 virus.
The interest rates of the schemes like Sukanya Samriddhi, Kisan Vikas Patra and Pubilc Provident Funds were reduced. The changes were introduced for Q1 of the fiscal year 2020-21. They are as follows
Rate of interest for Sukanya Samriddhi Account Scheme has been reduced from 8.4 to 7.6%. The scheme targets girl child and her parents. It encourages the parents to build fund for future education and marriage expenses of their girl child.
Public Provident Fund
Interest rate for Public Provident Fund reduced from 7.9 to 7.1%. It is savings-cum-tax saving scheme introduced in 1968 by the National Savings Institute operating under Ministry of Finance. The main aim of the scheme is to increase small savings offering returns based on the investments made with the savings deposited.
National Savings Certificate
Interest rate for National Savings Certificate 7.9 to 6.8%. It is a part of the postal savings system. It is a savings bond scheme launched for income tax savings and small savings.
Kisan Vikas Patra
Interest rate for Kisan Vikas Patra reduced from 7.6% to 6.9%. The KVP will mature in 124 months instead of 113 months earlier. It is a saving certificate scheme that was launched by India Post in 1988.
- Rate of interest for the Senior Citizen Savings Scheme reduced to 7.4 from 8.6%
- Rate of interest for the monthly income scheme lowered to 6.6% from 7.6%
- For five-year recurring deposit, the interest has been reduced from 7.2 to 5.8%.
- For five-year time-deposit, it has been brought down from 7.7% to 6.7%
- For three-years, two-years and one-year time deposits, the interest rate has been cut from 6.9 to 5.5%
- Interest on savings deposit stays unchanged at 4%.