A day before the Election Commission announces the schedule for the general elections, the government on Tuesday raised interest rates on some small savings schemes by up to 0.2%.
However, the rate of return on popular Public Provident Fund (PPF) and National Savings Certificates remained unchanged. The PPF would continue to fetch 8.7% per annum. Savings deposits of up to two years will fetch 8.4% against 8.2% earlier.
Deposit of three years will yield 8.4% against 8.3% earlier while fiveyear deposits will come with interest of 8.5%, 0.1 percentage point higher. Five-year recurring deposit will fetch 8.4% compared with 8.3% earlier.
The new rates will be effective April 1, the finance ministry said in a statement. The rate on 10-year NSC will remain at 8.8%. The model code of conduct comes into force after Lok Sabha elections announcement, which stops government from announcing anything that is seen to influence voters.
The revision of interest rates is based on the recommendations of the Shyamala Gopinath Committee, which has suggested benchmarking of the rates with those on government securities of similar maturity, with a spread of 25 basis points. Rates are revised once a year and the revision is effective April 1.
However, the rate of return on popular Public Provident Fund (PPF) and National Savings Certificates remained unchanged. The PPF would continue to fetch 8.7% per annum. Savings deposits of up to two years will fetch 8.4% against 8.2% earlier.
Deposit of three years will yield 8.4% against 8.3% earlier while fiveyear deposits will come with interest of 8.5%, 0.1 percentage point higher. Five-year recurring deposit will fetch 8.4% compared with 8.3% earlier.
The new rates will be effective April 1, the finance ministry said in a statement. The rate on 10-year NSC will remain at 8.8%. The model code of conduct comes into force after Lok Sabha elections announcement, which stops government from announcing anything that is seen to influence voters.
The revision of interest rates is based on the recommendations of the Shyamala Gopinath Committee, which has suggested benchmarking of the rates with those on government securities of similar maturity, with a spread of 25 basis points. Rates are revised once a year and the revision is effective April 1.
Source:-The Economic Times
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