PPF, NSC to earn lower interest from April 1

Small savings schemes including Public Provident Fund (PPF)will earn lower interest from April 1 2013, the government announced on Monday.

The rate of interest across most schemes has been lowered by0.1 percentage point. PPF which earned an annual interest of 8.8% in 2012-13,will now offer 8.7% from the new financial year.

Senior Citizen Savings Scheme would offer 9.2% against 9.3%earlier, 10-year National Saving Certificate (NSC) would give 8.8% against 8.9%and 5-year NSC would return 8.5% instead of 8.6% last year.

However, interest rate on savings account and 1-year fixeddeposits remain unchanged at 4% and 8.2% respectively.

Small savings schemes are central government schemesoperated through a network of post-offices and nationalized banks.

The government, on the recommendations of the ShyamalaGopinath Committee, has benchmarked interest rates on Small Savings schemes toyields on government securities of similar tenure, from April 2012.

The rates are revised once every year on 1st of April.