The investors who have invested their hard earned money in Public provident Fund (PPF) and various small saving schemes conducted by post office, would now earn lesser benefit as government has announced to cut the given interest rate by 0.1 percent.
The decision of rate cut in saving schemes come after the recommendations of Shyamala Gopinath Committee, which had suggested that returns should be in sync with market rates determined by the returns offered by other securities.
This rate cut will become effective from April 01, 2013 in all new and existing saving schemes.
After coming into effect, the interest rate in PPF will go down to 8.7% from current 8.8%.
The new interest rate in Monthly Income Schemes (MIS) and National Savings Certificates (NSC) of 5 year maturity, National Savings Certificates (NSC) of 10 years will go down to 8.4%, 8.5% and 8.8 % per cent respectively.
The rate for senior citizens savings scheme (SCSS) will now stand at 9.2 per cent, down from 9.3 per cent.
However, the rates on savings deposit schemes and on fixed deposit of up to one year run by post offices has been kept unchanged at 4 per cent and 8.2 per cent, respectively.
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