The Covid-19 situation has impacted millions of livelihoods in India, forcing the government and central bank to take drastic measures to provide relief. But the 75 basis point interest rate cut, announced by Reserve Bank of India (RBI), will result in much lower interest income for millions who invest in such small savings schemes.

Following the RBI’s slashing of repo rate, the government has announced sharp interest rate cuts for small savings schemes for the first quarter (April-June) of 2020-21.

Starting today, interest rates on popular small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and others will earn lower interest during the period.

While the interest rate on savings deposit was kept unchanged at 4 per cent, it was reduced by 80 basis point for the popular PPF scheme to 7.1 per cent. The interest fetched on PPF in the previous quarter was 7.9 per cent.