Since April 2016, interest rates of all small saving schemes have been linked to government bond yields and are now recalibrated on a quarterly basis. Over the last couple of years, interest rates of most small savings schemes have declined about 1 percentage point. For instance, the rate on Senior Citizen Savings Scheme has come down from 9.3% in FY2015-16 to 8.3% now.
While there was no change in the small savings rates in the October-December 2017 quarter, the rates were reduced for most schemes for the January-March quarter: Public Provident Fund (PPF), National Savings Certificate (NSC) and Kisan Vikas Patra were reduced 20 basis points for the January-March 2018 quarter. Senior Citizen Savings Scheme, however, continues with 8.3%.
