The government has kept the post office small savings schemes unchanged for October to December quarter (third quarter of FY20). "On the basis of the decision of the government, interest rates for small savings schemes are notified on a quarterly basis since 1 April 2016. Accordingly, the rates of interest of various small savings schemes for the third quarter of the financial year 2019-20 starting from 1 October 2019 and ending on 31 December 2019 shall remain unchanged from those notified for the second quarter (1st July 2019 to 30 September 2019) of the financial year 2019-20," the finance ministry said in a circular dated September 30, 2019.
The scheme rates comprising Public Provident Fund (PPF), Sukanya Samriddhi Account (SSY), National Savings Certificate (NSC) and Senior Citizen Savings Scheme (SCSS) are revised on a quarterly basis. These will earn the same interest rates in the third quarter of FY20 (2019-2020) as they were fetching throughout the July to September quarter. Thus, the PPF and NSC will continue to earn a 7.9% interest rate, SSY will offer 8.4% interest rate and the five-year SCSS will fetch 8.6% interest rate.
Other small savings scheme like Kisan Vikas Patra (KVP) will earn a 7.6% interest rate. The Monthly Income Scheme (MIS) will fetch a 7.6% interest rate. The post office term deposits (1-3 years) will offer an interest rate of 6.9% while, the post office 5-year recurring deposits will earn 7.2% interest rate.
This move by the government will bring relief to small depositors and senior citizens since the banks have been decreasing the interest rates on their fixed deposits (FDs) since the beginning of the financial year in line with the Reserve Bank of India's (RBI) reduction in its key policy rates.