The government left interest rates unchanged for small savings schemes such as public provident fund, national savings certificate and others for the sixth consecutive quarter, (October-December) bringing relief for middle class investors, who park their savings in such schemes for better returns.
The five-year post office deposit scheme will continue to offer a 6.7% rate, while the PPF will give 7.1% return. The returns on small savings are comparatively higher against the backdrop of the low interest rate regime overall. The senior citizens’ savings will also continue to have a rate of 7.4% and the Sukanya Samriddhi Yojana will continue to get a return of 7.6%.
The last round of sharp rate cuts unveiled in April had to be rolled back due to protests from investors. The rate cuts came in the midst of the West Bengal elections and the government promptly reversed the decision and decided to maintain a status quo. The concerns over price rise and stubborn petrol and diesel prices may have prompted the government to reverse the decision.