New Delhi: After a gap of several years, the government has raised interest on small savings, including NSC and PPF, by up to 0.4 per cent for the October-December quarter, in line with rising deposit rates in the banks.
The move, Finance Minister Arun Jaitley said in a tweet is aimed at supporting small savers as the interest rates for small savings scheme have been increased by 0.3-0.4 per cent for the third quarter of this year
In another tweet he said, it will "promote the welfare of the girl child and improve the financial security of the elderly. The government, from 1st October, has increased returns on Sukanya Samridhi Yojana from 8.1 per cent to 8.5 per cent, and on Senior Citizens Savings Scheme from 8.3 per cent to 8.7 per cent".
The interest rate on almost all small saving schemes has been declining since April 1, 2012.
As per the Finance Ministry notification, the interest rate on popular Public Provident Fund (PPF) has been increased to 8 per cent for the third quarter from 7.6 per cent.
Kisan Vikas Patra (KVP) will now yield an interest rate of 7.7 per cent as against 7.3 per cent earlier. Now, with a hike of 0.4 per cent hike in interest rate, deposits in the form of KVP will mature in 112 months compared to 118 before.
The interest rate for the five-year term deposit, recurring deposit Senior Citizens Savings Scheme has been raised to 7.8, 7.3 and 8.7 per cent, respectively.