Small Savings Scheme Interest Rate
Capital market in India keeps on changing on quarterly basis. Since last one year central government has given special attention to the small savings. A country like India where majority is middle class population small savings is the most accelerated investments. On Wednesday, 27th of December 2017, the government has cut down interest rates on small savings.
Interest Rate Slash for Small Savings
Small saving in capital market is saving accounts that come with little maturity period. Also these are the accounts where investor can put any amount of money starting from Rs. 500/- or less up to Rs. 1 Lac or Rs. 1.5/- Lac maximum. National Saving Certificate, Public Provident Fund, Post Office Deposit, Kisan Vikas Patra and such are some of the small saving accounts in India.
NSC, KVP, SSA and other small saving accounts provide a certificate against a sum of money that households keep them for future. Yearly interest rate is being levied on these certificates.
This year the interest rate has been slashed down by 0.2 points from the rate of last year. This revised rate will be applicable for the months of January, February and March in the year 2018.
Interest Rates on Small Investments
- While the interest rates on the small savings have been lowered down by 0.2 points, the saving account rate is still the same at 4% per annum. Interest on other savings like NSC, PPF, KVP and SSA will reduce from next quarter.
- For the senior citizen saving account the rate of interest is 8.3% per annum. It didn’t change after the revision of rates by the government. The maturity period for this account is 5 years.
- The interest rates for the NSC and PPF will be 7.6% per annum against last quarter 7.8% per annum. KVP will yield annual rate of 7.3% against 7.5% from last quarter. The time span of these savings’ maturity is 11 months.
- Currently the interest rate levied on Sukanya Samriddhi Account is 8.3% per year. The revised rate will be 8.1% after January 2018, as per the new interest rate.
- Various term deposits like 1 year, 2 years and so on up to 5 years will yield up to 7.4% with minimum of 6.6% for 1 year against 6.8% in last quarter.
|Investment Details||Revised Interest Rate (Jan – March 2018)||Previous Interest Rate (Oct – Dec. 2017)|
|National Saving Certificate||7.6||7.8|
|Public Provident Fund||7.6||7.8|
|Kisan Vikash Patra||7.3||7.5|
|Sukanya Samriddhi Account||8.1||8.3|
|Senior Citizen Saving Account||8.3||8.3|
|Time Deposit (3 years)||6.9||7.1|
|Time Deposit (5 years)||7.4||7.6|
|Monthly Income Account||7.3||7.5|
From last year 2016, in the month of April the government has started revising the interest rates on small savings on quarterly basis. In this quarter the authority has cut down the interest rates to reduce the interest rates on bank deposits. This interest revision will be able to trigger the banks for lowering down the existing bank deposit rates. This will lead to more money supply in the economy in future time.