Subhash Garg, Economic Affairs Secretary
The finance ministry on Monday indicated that the interest rate on small savings schemes may not go up in the next quarter.
Government fixes every quarter interest rates of small savings schemes like PPF, NSC, senior citizen savings scheme and Sukanya Samriddhi Scheme.
When asked whether the rising bond yield could prompt the government to raise interest rates on small savings schemes from April 1, Economic Affairs Secretary Subhash Chandra Garg said, "No, not in this quarter."
Since 2016, the government has linked the small savings
deposit rate with the benchmark Government Securities (G-Sec) rate.
For the January-March quarter, the government had reduced interest rates on such schemes by 0.2 percentage points.
Accordingly PPF and NSC fetch a lower annual rate of 7.6 per cent, while KVP gives 7.3 per cent yield. The girl child savings scheme, Sukanya Samriddhi, offers 8.1 per cent annually.
Term deposits of 1-5 years have a lower 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.