On Friday, the finance ministry kept interest rates on small savings plans including the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY), other post office plans unchanged for the fourth quarter of exercise 22 amid increasing cases of the more contagious variant of the Omicron coronavirus and high level of inflation.
” The interest rates of the various small savings plans for the third quarter of fiscal year 2021-2022 beginning on January 1, 2022 and ending on March 31, 2022, will remain unchanged from the current rates applicable for the third quarter (from October 1, 2021 to December 31, 2021) for the 2021-22 fiscal year, “the finance ministry said in a notification.
The decision also comes ahead of parliamentary elections in five states – Uttar Pradesh, Uttarakhand, Punjab, Himachal Pradesh and Goa. The election schedule is expected to be announced early next month.
The Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to bear an annual interest rate of 7.1% and 6.8%, respectively, in the fourth quarter as well.
Analysts say the government has kept rates intact for the upcoming parliamentary elections in five states.
Uttar Pradesh is the second largest contributor to the small savings plan after West Bengal. Earlier this year, in the West Bengal assembly election, the Center decided to cut the interest rate. But the finance ministry quickly canceled a sharp cut in interest rates of up to 1.1% for the first quarter on small savings plans, citing surveillance. As a result, the rates for the first quarter were maintained at the level of the fourth quarter of the previous year. The cut has been touted as the steepest cut for many decades.
Small savings interest rates are released quarterly.
The one-year term deposit plan will continue to earn an interest rate of 5.5% in the second quarter of the current fiscal year, while the Sukanya Samriddhi Yojana account of the girls’ savings plan will gain 7.6%.
The interest rate for the five-year senior savings plan would be maintained at 7.4%. The interests of the senior citizens’ scheme are paid quarterly.
The interest rate on savings deposits will remain at 4 percent per annum.
One- to five-year term deposits will carry an interest rate in the range of 5.5 to 6.7 percent, payable quarterly, while the interest rate on five-year recurring deposits will pay off. 5.8 percent higher interest.
With contributions from agencies