March 31:Interest rate on small savings schemes, including PPF, Kisan Vikas Patra (KVP) and senior citizen deposits, will be cut by up to 1.3 per cent from tomorrow as the government moves towards quarterly alignment of rates with the market.
Interest rate on Public Provident Fund (PPF) scheme will be 8.1 per cent for the period April 1 to June 30, down from 8.7 per cent.
On KVP, it will be reduced to 7.8 per cent from 8.7 per cent while senior citizen savings scheme of five years would earn 8.6 per cent interest compared to 9.3 per cent.
Girl-child saving scheme, Sukanya Samriddhi Account will see interest rate of 8.6 per cent as against 9.2 per cent, according to a Finance Ministry order.
However, unlike previous years when interest rates were set for the full year, the government will from now on set them every quarter, based on the previous 3-month yields on Government-Securities or G-Sec.
While the interest rate on Post Office savings has been retained at 4 per cent, the same for term deposits of one to five years has been cut.
The popular Five-Year National Savings Certificates will earn an interest rate of 8.1 per cent from April 1 as against 8.5 per cent, at present.
A five-year Monthly Income Account will fetch 7.8 per cent as opposed to 8.4 per cent.
Post Office term deposits of one, two and three years command an interest rate of 8.4 per cent but from April 1, a one-year time deposit will get 7.1 per cent, two-year time deposit will earn 7.2 per cent and 3-year time deposit will attract interest of 7.4 per cent.