Modi govt rolls back interest rates cut on small savings

Union Finance Minister Nirmala Sitharaman tweeted, "Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn."

Sitharaman's announcement of the roll back came hours after the government faced flak, at least on social media, over the cut in the interest rates.

The government on Wednesday slashed the interest rate on small savings from 4 per cent to 3.5% annually, while the Public Provident Fund (PPF) will be down from 7.1% to 6.4%.

From Apr 1, which marks the beginning of the new financial year, the National Savings Certificate (NSC) will get an interest of 5.9% and the Sukanya Samriddhi Yojana will guarantee an interest rate of 6.9%.

The Centre has cut the interest rate for the five-year Senior Citizens Savings Scheme, paid quarterly, to 6.5%.

The interest rate on Kisan Vikas Patra (KVP) has also been lowered to 6.2%.

The interest rate on post office savings deposits has been struck down to 3.5% while term deposits of one-to-five years will fetch interest rate in the range of 4.4-5.1%, to be paid quarterly, as per the revised guideline.

Meanwhile, the interest rate on a five-year recurring deposit will be 5.8%.