PPF Rates Cut: Govt Withdraws Order To Reduce Interest Rates On Small Savings Schemes

The rates of interest on various small savings schemes for the first quarter of FY 2021-22, were revised but the government has withdrawn its decision.

New Delhi: The government has withdrawn its order to revise the interest rates on small saving schemes on Thursday morning. The government had announced on Wednesday evening to cut interest rates on small savings schemes, including NSC and PPF, by up to 1.1 percent for the first quarter of 2021-22 inline with falling fixed deposit rates of banks.

On Public Provident Fund (PPF), the interest rate was reduced by 0.7 percent to 6.4 percent and as for National Savings Certificate (NSC), it was 0.9 percent less at 5.9 percent. But Finance Minister Nirmala Sithraman announced that the decision by the central government has been revoked.

The government had announced a cut in small savings rates by 50-100 basis points for the first quarter of the new financial year. It was the second time that interest rates on small savings schemes have been cut in the past one year. In the April-June quarter of 2020-21, the government had slashed rates of small savings schemes by 70-140 bps.

Sitharaman announced withdrawing the move this morning. "Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn,” she said on Twitter.