Interest rates on small savings schemes likely to be reduced from April

 New Delhi: Interest rates on small savings schemes are likely to be reduced for the upcoming April-June quarter, according to central government sources. If that happens, it will be the first time in five years that interest rates have been cut.

 

Interest rate

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After the Reserve Bank of India (RBI) reduced the repo rate for short-term loans to banks from 6.50 percent to 6.25 percent, banks are likely to reduce interest rates on deposits.

In this context, it is said that the interest rate on small savings schemes is also likely to be reduced.

 

The interest rates for these are fixed in line with the interest rates on central government bonds with similar maturities as small savings schemes. This is fixed by the Union Finance Ministry once a quarter.

 

The interest rates for the upcoming April-June quarter will be announced by the end of March. The interest rates for the current January-March quarter were announced last December.

Despite the reduction in interest rates, it is expected that more investment will continue to be made in these schemes. This is because the interest offered by these schemes is slightly higher than most bank deposit schemes.

 

Meanwhile, the 'Mahila Samman Savings Certificate' scheme announced in the budget for the financial year 2023-24 will end in March, and the government has not said anything about the future of the scheme.

Under this scheme for women, a maximum deposit of Rs 2 lakh can be made. It is noteworthy that interest will be paid at a fixed rate of 7.50 percent.