The government has left the interest rates on small savings schemes such as the Public Provident Fund (PPF) and the National Savings Certificate (NSC) unchanged for the July-September quarter.
A hike in small savings rate was expected in view of a surge in yields on government bonds, to which their returns are linked as per a formula, amid a surge in inflation and increases in key interest rates by the central bank.
“The status quo on small savings rates for the next quarter is contrary to our expectations of a hike in rates, given the sharp increases seen in the yields on government securities of various maturities,” said ICRA chief economist Aditi Nayar.
