No hike, PPF, NSC, post office deposit schemes interest rates remain unchanged

The quarterly revision in the interest rates of small savings schemes brought no good news for the investors as the government maintained status quo on small savings schemes, including NSC and PPF for the July-September quarter. Experts believe, the move is aimed at matching the rising interest rates in the banking sector. Interest rates for small savings schemes are notified on a quarterly basis.

"...The rates of interest on various small savings schemes for the second quarter of financial year 2018-19 starting July 1 and ending on September 30, 2018 shall remain unchanged from those notified for the fourth quarter of financial year 2017-18," the Finance Ministry said in a note, while notifying the rates for the second quarter.

Interest rate for the five-year Senior Citizens Savings Scheme has been retained at 8.3 per cent. The interest on the senior citizens' scheme is paid quarterly.

Interest on savings deposits has been retained at 4 per cent annually.

Public Provident Fund (PPF) and National Savings Certificate (NSC) will fetch annual interest rate of 7.6 per cent while Kisan Vikas Patra (KVP) will yield 7.3 per cent and mature in 11 months.

The girl child savings scheme Sukanya Samriddhi account will offer 8.1 per cent rate.

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Term deposits of 1-5 years will fetch interest rate of 6.6-7.4 per cent, to be paid quarterly, while the five-year recurring deposit is pegged at 6.9 per cent.

While announcing the quarterly setting of interest rates in 2016, the Finance Ministry had said that rates of small savings schemes would be linked to government bond yields. 

The move is expected to see banks lowering their deposit rates in line with the small savings rate offered by the government.