NEW DELHI: Millions of small savers and PPF account holders will earn less on their post office savings schemes, with the government deciding to reduce interest rates on them marginally by 0.10%.
The interest rate of Public Provident Fund (PPF) has been lowered from 8.8% to 8.7% with effect from April 1, 2013, said a finance ministry statement.
However, the rates on savings deposit schemes and on fixed deposit of up to one year run by post offices has been kept unchanged at 4% and 8.2%, respectively.
Further, monthly income schemes (MIS) of 5 year maturity will earn an interest of 8.4%.
The national savings certificates ( NSC) having maturity of five and 10 years will now attract 8.5% and 8.8% interest respectively, down 0.10% each.
The interest rates would be applicable for the entire 2013-14 fiscal.
The rate for senior citizens savings scheme (SCSS) will now stand at 9.2%, down from 9.3%.
The revision in interest rates follows a decision taken by government last year to link the small savings returns with the market rate. The new rates are required to be announced at the beginning of a financial year.
The decision is in line with the recommendations of Shyamala Gopinath Committee, which had suggested that returns should be in sync with market rates determined by the returns offered by other securities.