For the first quarter of the new fiscal year, the government announced a 50-100 basis point reduction in modest savings rates. It was the second time in a year that interest rates on modest savings accounts had been reduced.
Prior to this, the government has reduced modest savings program rates by 70-140 basis points for the April-June 2020-21 quarter. As a result of the reversal, the PPF interest rate will continue at 7.1 percent for the current quarter, rather than 6.4 percent.
Similarly, interest rates on National Savings Certificates and Kisan Vikas Patra would be 6.8% and 6.5 percent, respectively. Sukanya Samridhi Account Scheme would have the highest rate, at 7.6%, compared to 6.9% published on Wednesday.
Millions of depositors would have been harmed by the program cutbacks, which were announced at the same time as elections to four state legislatures and the union territory of Puducherry. According to sources, the administration has received authority from the Election Commission to examine interest rates on a regular basis.
