NEW DELHI: Seeking to align interest on small savings with market rates, the Government today cut rates on short-term post office deposits by 0.25 per cent but left long-term instruments such as MIS, PPF, senior citizen and girl child schemes untouched.
Post office savings of 1, 2 and 3 year term deposits, Kisan Vikas Patra (KVP) as well as 5-year Recurring Deposits till now earned 0.25 per cent higher interest than the Government securities of similar tenures.
This advantage has been withdrawn with effect from April 1, 2016, a Finance Ministry statement said, adding henceforth the rates would be revised every quarter.
Sukanya Samriddhi Yojana, Senior Citizen Savings Scheme and the Monthly Income Scheme (MIS) — which command 0.75 per cent, 1 per cent and 0.25 per cent higher interest rate respectively than G-secs — will remain untouched as they are linked to social security goals.
Similarly, long-term instruments such as 5-year term deposit and similar tenure National Saving Certificates as well as Public Provident Fund (PPF) have been left unchanged. (AGENCIES)
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