The government has announced that there will be no change in interest rates of various small savings schemes for Q2 of FY 2018-19.
Bad news for investors, particularly those who bank on small savings schemes like MIS, NSC, SCSS and PPF for retirement income or day-to-day living. For, at a time when interest rates – both lending and deposit – are going up, the government has notified that there will be no change in interest rates of various small savings schemes.
“On the basis of the decision of the government, interest rates for small savings schemes are notified on quarterly basis since April 2016. Accordingly, the rates of interest on various small savings schemes for the second quarter of financial year 2018-19 staring 1st July, 2018 and ending on 30th September, 2018 shall remain unchanged from those notified for the first quarter of financial year 2018-19,” the government has notified.
This has certainly come as bad news for those who were expecting the interest rates for small savings schemes to go up in the current rising interest regime. It may be noted that the government had reduced interest rates for Q4 of 2017-18 by 0.2% as compared to Q2 and Q3 for most of the small savings schemes.
Revised rates of interest on various small savings schemes for Q1 and Q2 of FY 2018-19:
“In general, the government is pursuing the policy of protecting the interest of small savers, especially savings for the benefit of girl child (SSAS), senior citizens (SCSS), etc. However, it may be noted that a reduction of 0.2% in interest rates on small saving has been effected during Q4 (0.1% in Q1 and Q2) of FY 2017-18 across the schemes except the Post Office Savings Account, which has been left untouched since 2015-16. However, there was no change in Q3 interest rates for small savings,” said ICAI in its Income Tax Update.