Government reversed decision to cut interest rates on small savings schemes, old rates will remain applicable
new Delhi. Finance Minister Nirmala Sitharaman tweeted late on Thursday night that the rates from which interest was being received on small savings schemes in the last quarter of the year 2020-21, will continue to be the same in the first quarter of 2021-22. He said that the orders which were issued to cut interest rates are being withdrawn and interest will continue to be paid on them as before. The Finance Ministry announces interest rates on these schemes every quarter.
Why the government reversed the decision
The government had decided to cut the interest rates on small savings schemes from half a percent to one percent, bringing the interest rate on PPF to a low of 46 years. Because of which there was a fear of spreading dissatisfaction among the common people. One reason for this is that small savings schemes are quite popular in the middle class of the country. Due to which the government had to change its decision late at night.
Rates had come down to 46-year low
For the first time in 46 years, the interest rate came down to 6.4 per cent from 7 per cent due to the government’s decision to cut interest rates. Similarly, the rate of interest on National Savings Certificates was also reduced from 6.8 per cent to 5.9 per cent. Along with this, the interest rate on Sukanya Samriddhi Yojana was also reduced from 7. 6 percent to 6.9 percent. Interest rates on saving schemes of senior citizens were also reduced from 7.4 percent to 6.5 percent. The interest rate on Kisan Vikas Patra was also reduced from 6.9 percent to 6.2 percent. The interest rate on the Post Office Savings Scheme was reduced from four percent to 3.5 percent.