Govt slashes rates on small savings by up to 110 basis pts

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Govt slashes rates on small savings by up to 110 basis pts


(This story originally appeared in on Apr 01, 2021)

New Delhi: The government has slashed interest rates on small savings schemes, such as post office deposits and public provident fund, by up to 110 basis points, dealing a fresh blow to savers seeking safety.

The new rates, effective Thursday and applicable for the first quarter, coincide with the government’s move to tax interest income on annual employee contributions of over Rs 2.5 lakh in PF, while giving government employees exemption up to Rs 5 lakh contribution.

The rate of interest on public provident fund is now at 6.4%, its lowest since 1974, according to National Savings Institute data.

Senior Citizens Saving Schemes and National Sav-ings Scheme will see a 90-basis point reduction, while the popular PPF and Kisan Vikas Patras will see a 70-basis point fall.



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