The Reserve Bank today notified a 0.1 per cent reduction each in interest rates on the Public Provident Fund ( PPF) and the Senior Citizen Savings Scheme (SCSS), to be effective from the financial year beginning April 1, 2013.
The rate of interest on PPF has been lowered from 8.8 per cent to 8.7 per cent.
The rate of interest on a fiveyear SCSS has been reduced to 9.2 per cent from 9.3 per cent for entire 2013- 14 financial year, it said.
RBI said the new rates will come into force from April 1, 2013, following government’s memorandum on March 25, which advised on the rate of interest on various small savings schemes for the financial year 2013- 14.
RBI said banks should bring this content to the notice of their branches operating PPF and SCSS accounts. It also said the new rates should also be displayed on the notice boards of their branches for information of the PPF and SCSS subscribers.
Following the government’s decision earlier this week, millions of small savers and PPF account holders will earn less on their post office savings schemes. However, the government kept unchanged rates on savings on deposit schemes and on fixed deposit of up to one year run by post offices at four per cent and 8.2 per cent, respectively.
Further, post office Monthly Income Schemes ( MIS) of five- year maturity will earn an interest of 8.4 per cent.
The National Savings Certificates ( NSC), having maturity of five and 10 years, will attract 8.5 per cent and 8.8 per cent interest, respectively, down 0.10 per cent each.
Revision in interest rates follows a decision taken by government last year to link small savings returns with market rate.
Full Notification is reproduced here:
Public Provident Fund Scheme, 1968 (PPF, 1968) and
Senior Citizens Savings Scheme, 2004 (SCSS, 2004) – Revision of interest rates
Please refer to our circular RBI/2011-12/359 dated January 20, 2012 regarding interest rates on small savings schemes, wherein it was indicated that as per Government’s decision on revision of interest on small savings schemes, the interest rates on various small savings schemes for every financial year will be notified by the Government before April 01st of that year.
2. The Government of India has now vide their Office Memorandum (OM) No. 6-1/2011-NS.II (Pt.) dated March 25, 2013, advised the rate of interest on various small savings schemes for the financial year 2013-14. Accordingly, the rates of interest on PPF, 1968 and SCSS, 2004 for the financial year 2013-14, effective from April 01, 2013, on the basis of the interest compounding/payment built-in in the schemes, will be as under:
Scheme Rate of Interest w.e.f. 01.04.2012 Rate of Interest w.e.f. 01.04.2013 5 year SCSS, 2004 9.3% p.a 9.2% p.a PPF, 1968 8.8% p.a 8.7% p.a
3. The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 and SCSS, 2004 schemes. These should also be displayed on the notice boards of your branches for information of the PPF, 1968 & SCSS, 2004 subscribers.