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Govt raises interest rates on small savings schemes; PPF, NSC to now yield 8%

Govt raises interest rates on small savings schemes; PPF, NSC to now yield 8%

Govt raises interest rates on small savings schemes; PPF, NSC to now yield 8%
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By CNBC-TV18 Sept 24, 2018 5:34:54 PM IST (Updated)

The Finance Ministry on Thursday raised the interest rates for small savings schemes for the December quarter, after keeping them unchanged for the first two quarters of the current fiscal year.

The Finance Ministry on Thursday raised the interest rates for small savings schemes for the December quarter, after keeping them unchanged for the first two quarters of the current fiscal year.

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The interest rates have been raised between 30 to 40 bps (basis points) for the period from October 1 to December 31. One basis point is a hundredth of a percentage point.
The ministry has raised the interest rate of one-year, two-year, three-year time deposit rates by 30 bps to 6.9 percent, 7 percent and 7.2 percent, respectively.
Rates in the five-year time deposit and five-year recurring deposit have been raised by 40 bps to 7.8 percent and 7.3 percent, respectively.
Public Provident Fund (PPF) and National Savings Certificate (NSC) will fetch annual interest rate of 8 percent as compared to existing 7.6 percent, while Kisan Vikas Patra (KVP) will yield 7.7 percent.
Interest rates on the girl child savings scheme Sukanya Samriddhi account has also been raised to 8.5 percent.
The development comes after the Reserve Bank of India in August raised interest rates for the second straight meeting, but retained its "neutral" stance as it aimed to contain inflation while not choking growth.
(With inputs from agencies)
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