The government has slashed interest rates on small savings schemes like National Savings Certificate (NSC), Sukanya Samriddhi Account (SSA), Kisan Vikas Patra (KVP) and Public Provident Fund (PPF) by 0.2 percentage points for January-March'18.
PPF and NSC will now fetch 7.6%, KVP 7.3% and SSA, 8.1%.
Interest on Senior Citizens Savings Scheme and savings deposits has been retained at 8.3% and 4% respectively.
According to the government notification, term deposits of one-five years will bring lower interest of 6.6-7.4%, to be paid quarterly. Five-year recurring deposits have been pegged at 6.9%. The government had said small savings schemes rate would be linked to government bond yields.
PPF is a tax-free savings avenue introduced in 1968, especially to encourage people to create a retirement corpus. Accounts can be opened at any nationalized, authorized bank and authorized post offices. Interest earned on PPF deposits isn't taxable.