The govt has today issued a press release under which interest rate on PPF ,NSC,KVP,MIS,RD and all other post office scheme /small saving ...
The govt has today issued a press release under which interest rate on PPF ,NSC,KVP,MIS,RD and all other post office scheme /small saving schemes will be reduced from 01.04.2016. The new rates will be applicable for the period 01.04.2016 to 30.06.2016.However it is expected that most of these rates will not be increased in near future even after 01.07.2016 the trend will be on decreasing side.The next change in rate will be announced on 15/06/2016.
If you are interested in investing in above scheme then invest before 01.04.2016 ,specially where interest rate on date of investment is locked for the full tenure of the instrument.The scheme in which interest will be locked for whole of the tenure of instrument are National saving scheme , Kissan vikas patra ,Post office time deposit, post office recurring deposit,Monthly income scheme ,senior citizen saving scheme.
However interest on PPF will be reduced for accumulated balance also, Means interest on amount deposited before 01.04.2016, will be paid at reduced rate.
This rate reduction also suggests that interest rate will be reduced by RBI also in bimonthly review in first week of April /2016 and your EMI will also be reduced in coming days.
Press release from Govt.
From the year 2012-13, the interest rates on various Small Savings Schemes (SSS) are recalculated and notified in the month of March every year. These rates are applicable for the next financial year. This is being done in line with the recommendations of the Shyamala Gopinath Committee to ensure that the interest rates of Small Savings Schemes are market linked.
Accordingly, as done in the previous years, the interest rates for various Small Savings Schemes were due for recalculation in March 2016. As notified on 16th February, 2016, instead of annual resetting of interest rates for the next financial year, the interest rates from now on will be reset every quarter based on the G-Sec yields of the previous three months. Consequently, the interest rates for various Small Savings Schemes were recalculated with reference to the G-Sec yields of equivalent maturity for the months December 2015 to February 2016. Based on this calculation, the interest rates on various Small Savings Schemes for the 1st quarter of 2016-17 have been notified today. The rates of interest on various small savings schemes for the First Quarter of Financial Year 2016-17, on the basis of the interest compounding/payment built-in in the schemes, shall be as under:
Rate of interest w.e.f. 01.04.2015 to 31.3.2016
Rate of interest w.e.f. 01.04.2016 to 30.6.2016
1 Year Time Deposit
2 Year Time Deposit
3 Year Time Deposit
5 Year Time Deposit
5 Year Recurring Deposit
5 Year Senior Citizens Savings Scheme
5 year Monthly Income Account Scheme
5 Year National Savings Certificate
Public Provident Fund Scheme
Kisan Vikas Patra
7.8 (will mature in 110 months)
Sukanya Samriddhi Account Scheme
This is a formula driven process.
Further, as notified earlier, the additional interest rate spreads which the Government allows on Small Savings Schemes like PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme, NSC etc. are being continued. The additional spread for these Schemes are 25 basis points for PPF, 100 basis points for Senior Citizen Savings Scheme, 75 basis points for Sukanya Samridhi Scheme, 25 basis points for five year time deposit, 25 basis points for National Savings Certificate and 25 basis points for Monthly Income Scheme. These additional interest rate spreads are being continued and are included in the rates notified today.
The quarterly revision of interest rates will ensure that the interest rates under Small Savings Schemes are more dynamically related to the current market rates, thereby enabling the Banks to move their interest rates in line with current money market rates.