After EPF charge lower, will rates of interest on PPF, small financial savings schemes go down?
Amid the rising rates of interest of mounted deposits (FDs), the Reserve Bank of India (RBI) has claimed that the rates of interest on small financial savings schemes are increased. “The Government of India reviewed rates of interest on small saving devices (SSIs) on December 31, 2021, and left them unchanged for the seventh straight quarter. The present rates of interest on SSIs are 42-168 bps increased than the formula-based charges for This fall:2021-22,” RBI stated in its “State of the Economy” report.
In latest months, a number of main banks, together with SBI, HDFC Bank, ICICI Bank, Bank of Baroda, Axis Bank, have began elevating rates of interest on time period deposits.
“Across home banks, non-public banks proceed to exhibit increased pass-through to time period deposit charges in comparison with their public sector counterparts. In latest months, a number of main banks have began elevating rates of interest on deposits, anticipating a pick-up in credit score demand,”RBI stated in its report.
The authorities is predicted to overview rates of interest on small financial savings schemes for the primary quarter of 2022-23 on 31 March.
These schemes embody Public Provident Fund Account (PPF ) with an rate of interest of seven.1%, Sukanya Samriddhi Accounts with an rate of interest of seven.6%, Senior Citizen Savings Scheme (SCSS) with an rate of interest of seven.4 % each year.
Other small financial savings schemes embody Post Office Savings Account(SB) with an rate of interest of 4% p.a., 5-Year Post Office Recurring Deposit Account (RD) with an rate of interest of 5.8 % each year, Post Office Time Deposit Account (TD) with an rate of interest of 5.5% – 6.7%, Post Office Monthly Income Scheme Account (MIS) with an rate of interest of 6.6 % each year, National Savings Certificates (NSC) with an rate of interest of 6.8% and Kisan Vikas Patra (KVP ) with an rate of interest of 6.9 %.
The Employees’ Provident Fund Organisation (EPFO) lately lower the rates of interest on EPF to a four-decade low of 8.1 per cent for 2021-22 fiscal from 8.5 per cent within the earlier yr. “The Central Board recommended 8.10 per cent annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2021-22 (ending on March 31, 2022),” labour ministry assertion stated.
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