The government today announced the interest rates for small savings schemes for the July-September 2017 quarter.
- Interest rate on Public Provident Fund (PPF) has been cut by 10 basis points to 7.8%
- Interest rate on Kisan Vikas Patra has been cut by 10 basis points to 7.5%
- Interest rate on National Savings Certificate has been cut by 10 basis to 7.8%
The interest rates on these schemes were cut even for the April-June quarter. A further reduction in interest rate will be another disappointment for small savers.
The Public Provident Fund and National Savings Certificate are guaranteed-income schemes that also earn a tax-saving deduction under Section 80C of the Income Tax Act. Both of these investments are availed by risk-averse investors who wish to get a fixed return from their investments. Reducing the interest rate on these schemes would hurt these small savers as they are long-term investments that investors depend upon.