Government withdraws small savings scheme interest rate cut

Government withdraws small savings scheme interest rate cut

Government withdraws small savings scheme interest rate cut

The central government declared that it has pulled back its decision to cut interest rates of small savings scheme. However, finance minister Nirmala Sitharaman has made this statement on 1st April on Twitter.

Early in the day, Sitharaman tweeted: “Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e., rates that prevailed as of March 2021.”

FM has also added that the orders issued by oversight will switch.

According to the source, the FM had already made an announcement on 31st March as interest rate cuts in the small savings deposit rate from 4% to 3.50% for the first quarter of the FY starting from April 2nd, 2021.

The ministry said the interest rate cuts of small saving schemes remain in line with the overall interest rate movement in the financial system. Further, the Economic Advisory Council to the Prime Minister member tweeted as “A decision was taken yesterday reversed today. It remains difficult for me to see how incompetent and incapable the FM has become like Air India, the FM of India has declined from being an icon to a demonstrably dysfunctional outfit”.

On March 31st, Finance Ministry said cut one-year time deposit rates to 4.40% from 5.50%. Further, for 2 and 3-year recurring deposit rates cut from 5.5% to 5%, and 5.1%. For 4 and 5 years from 6.7%, and 5.8% to 5.8%, and 5.3%, respectively.

As of the Finance Ministry statement, the Senior Citizen Savings schemes interest rates cuts from 7.4% to 6.5%. Further, the Public Provident Fund interest rate cuts to 6.4% from 7.1% and Kisan Vikas Patra to 6.2% from 6.9%. Sukanya Samriddhi Account Scheme from 7.6% to 6.9%.

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