The interest rates on the small savings schemes like post office savings scheme will remain fixed during its whole duration. The statement was recently released by the Government. It also clarified that the directions are not applicable on Public Provident Scheme (PPF).
The interest rates on Public Provident Fund (PPF), being a scheme which stretches for a longer duration, will not be fixed for its entire duration. The depositor will earn interest according to the rate for the pertinent year.
“The rate of interest on small savings schemes will be aligned every year with the rates of Government securities of similar maturity ... the rates are fixed and not floating so far as individual investments except PPF are concerned,” said Finance Ministry.
The interest rate applicable on small savings schemes will be declared on April 1 every year. The maturity amount will then be calculated according to that particular rate of interest.