Other small savings schemes, including PPF and Sukanya, will continue to earn higher interest rates, with no change in interest rates for the July-September quarter.

 Other small savings schemes, including PPF and Sukanya, will continue to earn higher interest rates, with no change in interest rates for the July-September quarter.

There has been no reduction in interest rates on post office savings schemes, including Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and Sukanya Samrudhi Yojana. This means that between July and September you will get the same interest rate that you are currently getting. Savers have been greatly relieved by not changing the interest rates of small savings schemes.

Other small savings schemes, including PPF and Sukanya, will continue to earn higher interest rates, with no change in interest rates for the July-September quarter.

Interest rates were cut in the last quarter but the decision was later reversed

The central government had decided to reduce interest rates on small savings schemes for the April-June quarter. But the decision was reversed within 24 hours. Then Finance Minister Nirmala Sitharaman said that the decision was made by mistake. The public decision by mistake reduced the interest rates of nine small savings schemes by up to 1.10%.

Interest rates were reduced on 1 April 2020

The government had reduced interest rates on small savings schemes on April 1, 2020 last year. Its interest rates were then reduced to 1.40%. It was then decided to reduce on 31 March 2021 as well, which was withdrawn.

Easy way to raise money Small savings plans

There is an easy way for the government to raise money from small savings schemes. In the budget for the financial year 2020-21, the government had estimated to raise Rs 2.4 lakh crore through small savings schemes, but in the revised estimate, the government had increased it to Rs 4.8 lakh crore. In the financial year 2020-21, there has been a borrowing of Rs 3.91 lakh crore through small savings schemes. To meet the economic losses, the government borrows only from small savings schemes.

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Interest rates are reviewed every three months

The interest rate of a small savings scheme is reviewed every three months. The formula for fixing interest rates of these schemes was given by the 2016 Shyamla Gopinath Committee. The committee suggested that the interest rate of this scheme should be 0.25-1.00% higher than the yield of government bonds with similar maturity.