NEW DELHI: The government has reduced interest rates on small saving schemes, including the Public Provident Fund (PPF), NSCs and Kisan Vikas Patra by 10 basis points. Prior to this rate cut, PPF, NSC and KVP were offering 7.9 percent, 7.9 percent and 7.6 percent respectively.The Senior Citizen’s Savings Scheme and Sukanya Samriddhi Yojana will now offer 8.3%. According to that formula, PPF rate should be 50 basis point above the benchmark bond yield. Given that the 10-year bond yield is hovering around 6.5%, the PPF rates should be not more than 7%. “In that context, the real rate of interest offered by small savings schemes is still quite attractive,” says Nagpal.

Source: Economic Times June 30, 2017 09:01 UTC