0.2% Cut in Interest Rates for Q4 of 2017-18 for Small Savings (NSC, PPF, KVP, SSAS, SCSS, etc.)

Revised Interest Rates for Small Savings Schemes (NSC, PPF, KVP, SSAS, SCSS, etc.), as per Latest Govt. Notifications: 0.2% Cut in Interest Rates for Q4 of 2017-18

A. Interest Rates on Small Saving Schemes for Q1, Q2, Q3 and Q4 of FY 2017-18 (i.e. 1 Apr. 2017 ~ 30 Jun. 2017, 1 Jul. 2017 ~ 30 Sep. 2017, 1 Oct. 2017 ~ 31 Dec. 2017 and 1 Jan. 2018 ~ 31 Mar. 2018)

On the basis of the decision of the Government, interest rates for small savings schemes are being notified by the Government before beginning of the each Quarter since FY 2016-17, to bring them somewhat closer to the prevailing market rates. These interest rates continue to be attractive as some of them enjoy income tax benefits and additional interest rate spreads.

Accordingly, the Govt. has notified the revised interest rates of various small savings schemes for the period 1 Apr. 2017 to 30 Jun. 2017, 1 Jul. 2017 to 30 Sep. 2017, 1 Oct. 2017 to 31 Dec. 2017 and 1 Jan. 2018 to 31 Mar. 2018 (i.e. applicable during the Q1, Q2, Q3 and Q4 of FY 2017-18).

It may be noted that as per Govt. announcement there will be 0.2% cut in Interest Rates for Q4 of 2017-18 as compared to Q2 and Q3 for most of the small savings schemes. In Q3 of FY 2016-17 there was no change in interest rates, whereas in Q1 and Q2 interest rates were mostly based on a cut of 0.1% for all small savings schemes, as compared to the corresponding previous quarters.

GoI Notification – 0.2% Cut in Interest Rates for Q4 (w.e.f. 1 Jan. 2018) for Small Savings

GoI Notification – No Change in Interest Rates for Q3 (w.e.f. 1 Oct. 2017) for Small Savings

GoI Notification – Revised Interest Rates for Q2 (w.e.f. 1 Jul. 2017) on Small Savings

GoI Notification – Revised Interest Rates for Q1 (w.e.f. 1 Apr. 2017) on Small Savings

In general, the Govt. is pursuing the policy of protecting the interest of small savers, especially savings for the benefit of girl child (SSAS), the senior citizens (SCSS), etc. However, it may be noted that a reduction of 0.2% in interest rates on small saving has been effected during Q4 (0.1% in Q1 and Q2) of FY 2017-18 across the schemes except the Post Office Savings Account, which has been left untouched since 2015-16. However there was no change in Q3 interest rates for small savings.

A1. Summary of Interest Rates Applicable for Small Savings Schemes during Financial Year 2017-18

Summarised table of the revised rates of interest on various small savings schemes for the FY FY 2017-18 (i.e. Q1: 1 Apr. 2017 ~ 30 Jun. 2017, Q2: 1 Jul. 2017 ~ 30 Sep. 2017 and Q3: 1 Oct. 2017 to 31 Dec. 2017) :

Instruments Interest Rate (Q1 of 2017-18) Interest Rate (Q2 and Q3 of 2017-18) Interest Rate (Q2 and Q4 of 2017-18)
Savings Deposit (SD) 4.0 4.0 4.0 (note 1)
1 Year Time Deposit (TD) 6.9 6.8 6.6
2 Year Time Deposit (TD) 7.0 6.9 6.7
3 Year Time Deposit (TD) 7.2 7.1 6.9
5 Year Time Deposit (TD) 7.7 7.6 7.4
5 Year Recurring Deposit (RD) 7.2 7.1 7.1 (Note 1)
5 Year Senior Citizens Savings Scheme (SCSS) 8.4 8.3 8.3
5 year Monthly Income Scheme (MIS) 7.6 7.5 7.3
5 Year National Savings Certificate (NSC) 7.9 7.8 7.6
Public Provident Fund (PPF) Scheme 7.9 7.8 7.6
Kisan Vikas Patra (KVP) 7.6* 7.5** 7.3***
Sukanya Samriddhi Account Scheme (SSAS) 8.4 8.3 8.3 (Note 1)

* will mature in 113 months. | ** will mature in 115 months. | ***will mature in 118 months

Note 1 : Attached notification has no specific mention of revised interest rates on KVP, applicable w.e.f. 1 Jan. 2018 and the 7.3% interest rate has been derived based revised maturity period of 118 months (previously 115 months). Further, no changes are reflected in respect of SSAS, RD and SD Accounts, so we have presumed that rates applicable in previous quarter will continue.

A2. Latest Interest Rates for Small Savings Schemes (Applicable during Q4 of 2017-18)

In short we can say that Latest/ New/ Revised Interest Rate for second/ third quarter of FY 2017-18 (i.e. 1 Jan. 2018 to 31 Mar. 2018) are as under:

i) Sukanya Samriddhi Account Scheme (SSAS) – 8.3% (refer Note 1 above)

ii) Public Provident Fund (PPF) – 7.6%,

iii) Senior Citizen Savings Scheme (SCSS) – 8.3%,

iv) Kisan Vikas Patra (KVP) – 7.3% (refer Note 1 above)

v) National Savings Certificate (NSC) – 7.6%,

vi) Post office MIS (Monthly Income Scheme) is 7.3%,

vii) Post Office Recurring Deposit (RD) – 7.1% (refer Note 1 above)

viii) Savings Deposit – 4% (refer Note 1 above), and

ix) Post Office Time Deposit – 6.6% to 7.4% based on tenure (as above).

B. Interest Rates on Small Saving Schemes for Q1 to Q4 of FY 2016-17 (i.e. 1 Apr. 2016 ~ 31 Mar. 2017)

During 2016-17, the Govt. has twice revised interest rates on various small savings schemes, i.e. interest rates for Q3 and Q4 of FY 2016-17 were similar and were mostly based on a cut of 0.1% compared to the rates notified for Q1 and Q2 of FY 2016-17. However, interest rates announecd for Q1 of FY 2016-17 were substantially reduced rates as compared to rates prevalent during the FY 2015-16. Relevant notifications, as issued by the Govt. from time to time are as under:

GoI Notification – Revised Interest Rates w.e.f. 1 Apr 2016 on Small Savings

GoI Notification – Revised Interest Rates w.e.f. 1 July 2016 on Small Savings

GoI Notification – Revised Interest Rates w.e.f. 1 Oct. 2016 on Small Savings

GoI Notification – Revised Interest Rates w.e.f. 1 Jan. 2017 on Small Savings

B1. Summary of Interest Rates Applicable for Small Savings Schemes during Financial Year 2015-16 and 2016-17

Summarised table of interest rates on various small savings schemes applicable during the FY 2015-16 (i.e. 1 Apr. 2015 to 31 Mar. 2016) and FY 2016-17 (i.e. Q1: 1 April 2016 ~ 30 June 2016, Q2: 1 July 2016 ~ 30 Sept. 2016, Q3: 1 Oct. 2016 ~ 31 Dec. 2016 and Q4: 1 Jan. 2017 to 31 Mar 2017):

Instruments Interest Rate 2015-16 Interest Rate (Q1 & Q2) 2016-17 Interest Rate (Q3 & Q4) 2016-17
Savings Deposit (SD) 4.0 4.0 4.0
1 Year Time Deposit (TD) 8.4 7.1 7.0
2 Year Time Deposit (TD) 8.4 7.2 7.1
3 Year Time Deposit (TD) 8.4 7.4 7.3
5 Year Time Deposit (TD) 8.5 7.9 7.8
5 Year Recurring Deposit (RD) 8.4 7.4 7.3
5 Year Senior Citizens Savings Scheme (SCSS) 9.3 8.6 8.5
5 year Monthly Income Scheme (MIS) 8.4 7.8 7.7
5 Year National Savings Certificate (NSC) 8.5 8.1 8.0
Public Provident Fund (PPF) Scheme 8.7 8.1 8.0
Kisan Vikas Patra (KVP) 8.7 7.8* 7.7**
Sukanya Samriddhi Account Scheme (SSAS) 9.2 8.6 8.5

* will mature in 110 months. |** will mature in 112 months.

6 Comments

  1. S. Sivaramakrishnan Feb 21, 2017
  2. H. Ananthanarayanan Mar 1, 2017
  3. H. Ananthanarayanan Mar 1, 2017
  4. Shanker Lal Mandowara Apr 21, 2017
  5. s. ramasatagopan Jun 30, 2017
  6. sushil chawathe Jul 6, 2017

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