Interest rates on small savings schemes to stay the same

www.mangaloretoday.com

New Delhi, Oct 1, 2017: In a welcome relief to the common public, the government retained the interest rates on small savings for the October-December quarter. The decision to hold rates comes after two successive cuts.

The Public Provident Fund scheme will continue to fetch 7.8% interest while the Kisan Vikas Patra will get 7.5%. Similarly, Sukanya Samridhi Yojana, the saving scheme for the girl child, will fetch 8.3% as earlier. The five-year senior citizen saving schemes will also fetch 8.3%.

“The government has decided that the rates of interest on the various small savings schemes for the third quarter of the financial year 2017-18 starting from October 1 shall remain unchanged from those notified for the second quarter of the same financial year,” the Ministry of Finance stated.

The interest rates on small savings schemes are revised on a quarterly basis since April last year after it was decided to link them with the yield on government bonds. Prior to this, the government had cut the rates in July. It had lowered them by 10 basis points or 0.1%. A similar cut in rates wereeffected in March.

The move comes at a time when many banks have reduced rates on a wide range of products - from savings accounts to fixed deposits - putting citizens, especially the elderly who survive on their retirement savings, in a tight spot.

A natural corollary to lowering interest rates on small savings is that the banks, too, cut their deposit rates as a result of which savings in the banks fetch lower returns. The government’s move to retain the rates will hopefully make banks maintain status quo on deposit rates in the third quarter starting October 1. Since small savings offer much better post-tax returns.

Today, October 1, is Senior Citizens day - it is high time that both Central and State Govts., pay attention to the struggle of these  aged and sick people in their sun set years. They face great injustice at the end of life ordeal. To add to all the attendant woes, the reduction of interest rates on small savings has reduced many to a plight worse than death with lack of money and rising prices on all sides.