Govt withdraws interest rate cut order on PPF, other small saving schemes

FM Nirmala Sitharaman today reversed the rate cut decision, which initiated a stir on social media yesterday.

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New Delhi: Finance Minister Nirmala Sitharaman took back the government’s decision of reducing the interest rates on small savings on Thursday (April 1). 

Earlier, on Wednesday (March 31), the government gave a big blow to the common people by cutting interest rates on small savings. However, taking it to Twitter the following day, Nirmala Sitharaman wrote, “Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn. @FinMinIndia @PIB_India”

Interest rates of small savings schemes of GoI shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021.
Orders issued by oversight shall be withdrawn. @FinMinIndia @PIB_India — Nirmala Sitharaman (@nsitharaman) April 1, 2021

The Finance Ministry in a circular on Wednesday announced that the interest rate on small savings deposits has been reduced to 3.5 percent from 4 per cent for the first quarter of 2021-22. 

Among the most popular schemes, which would have been affected, is Public Provident Fund (PPF). PPF after the announcement would have fetch a rate of 6.4 percent, down from 7.1 per cent earlier.