On March 31, 2020, the government announced a steep cut in the interest rates on small saving schemes. Public Provident Fund (PPF) will now fetch 7.1% interest rate for Q1 2020-21 (April to June). Likewise, interest rates on other saving schemes like Sukanya Samriddhi Yojana and National Savings Certificate also dropped by 0.8% and 1.1% respectively.
This reduction in the interest rates is not favourable for the fixed income investors and especially for the senior citizens who rely upon this interest income as a major source of income.
Here is the percentage change in the Small Saving schemes interest rates-
|Name of the Scheme||Interest Rates April to June (2020-21)||Interest Rates January to March (2019-20)|
|Public Provident Fund||7.1%||7.9%|
|Sukanya Samriddhi Yojana||7.6%||8.4%|
|National Savings Certificate||6.8%||7.9%|
|Kisan Vikas Patra||6.9%||7.6%|
|5 Year Monthly Income Account||6.6%||7.6%|
|Senior Citizen Savings Scheme||7.4%||8.6%|