The Government has drastically cut the interest rate on the Public Provident Fund (PPF) and other small savings schemes for March-June 2021. The PPF rate has been cut from 7.1% to 6.4%. The rate on National Savings Certificates (NSCs) has been reduced from 6.8% to 5.9%. The Senior Citizens Savings Scheme (SCSS) has seen its rate cut from 7.4% to 6.5%. Sukanya Samriddhi Scheme which was the highest paying small savings instrument saw its rate reduced from 7.6% to 6.9%. Kisan Vikas Patra (KVP) which has a tenor of 124 months, will now mature in 138 month. This amounts to a rate cut from 6.9% to 6.2%.
Other small savings products with interest rate reductions include post office term deposits, post office savings accounts and post office monthly income scheme (POMIS). The rates on post office term deposits were reduced from 5.5%-6.7% for tenors of 1-5 years to 4.4%-5.8%. The post office savings account saw its rate reduced from 4% to 3.5%. Interest rates on small savings schemes are reviewed every quarter. They were kept unchanged for the whole of FY 2020-21 after major rate cuts in April 2020.