From April 1, investment in the Kisan Vikas Patra small savings scheme fetches a lower return of 6.9 per cent, compared to 7.9 per cent in the quarter ended March 31. Also, the Kisan Vikas Patra's maturity period stands reduced to 124 months from April 1, compared to the existing period of 113 months. This means that now, any investment in the certificate scheme - available at designated post office branches - doubles in size in a period of 124 months with effect from April 1.The government has lowered interest rates on most small savings schemes by 80-140 basis points (0.8-1.4 percentage point) for the first quarter of financial year 2020-21, according to an official statement.
While the interest rate for Kisan Vikas Patra has been lowered to 6.9 per cent, here are the new rates for other small savings schemes:
| Instrument | Interest Rate In January-March | Interest Rate In April-June | Compounding Frequency |
|---|---|---|---|
| Savings Deposit | 4% | 4% | Annually |
| One-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Two-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Three-Year Time Deposit | 6.9% | 5.5% | Quarterly |
| Five-Year Time Deposit | 7.7% | 6.7% | Quarterly |
| Five-Year Recurring Deposit | 7.2% | 5.8% | Quarterly |
| Senior Citizen Savings Scheme (SCSS) | 8.6% | 7.4% | Quarterly and paid |
| Monthly Income Account | 7.6% | 6.6% | Monthly and paid |
| National Savings Certificate | 7.9% | 6.8% | Annually |
| Public Provident Fund | 7.9% | 7.1% | Annually |
| Sukanya Samriddhi Account | 8.4% | 7.6% | Annually |
| (Source: dea.gov.in) | |||
Currently, the Ministry of Finance offers nine types of small saving schemes, including the 15-Year Public Provident Fund (PPF), the Senior Citizen Savings Scheme (SCSS) and the Sukanya Samriddhi scheme, and revises the interest rates applicable to them on a quarterly basis.
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