The government of India revises the applicable interest rate on small savings schemes, GPF and other similar schemes at the beginning of each quarter of the financial year. The interest rate for GPF for the last quarter of the financial year 2019-2020 has been declared by the Department of Economic Affairs, a wing of the Ministry of Finance. The Department vide a notification has announced that the applicable rate of interest on GPF and other similar schemes for the last quarter ending March 2020 will be 7.9 percent compounded annually.
The revised rate of interest will be applicable to which funds?
The recently revised rate of interest of 7.9 percent shall apply to the following funds:
- The General Provident Fund (Central Services)
- The Contributory Provident Fund (India)
- The All India Services Provident Fund
- The State Railway Provident Fund
- The General Provident Fund (Defence Services)
- The Indian Ordnance Department Provident Fund
- The Indian Ordnance Factories Workmen’s Provident Fund
- The Indian Naval Dockyard Workmen’s Provident Fund
- The Defence Services Officers Provident Fund
- The Armed Forces Personnel Provident Fund
Revised interest rate and small savings schemes
Erstwhile, the small savings schemes of the post office, such as Public Provident Fund (PPF), NSC, etc had a constant rate of interest for the last quarter of every financial year. According to the latest notification by the Department of Economic Affairs, the interest rate on such small savings also has been revised to 7.9 percent.
As per the General Provident Fund (Central Services) Rules, the subscription to Provident Fund is terminated three months before superannuation. Further, Contributory Provident Fund Rules (India), 1962 which applies to all non-pensionable government employees, also facilitates withdrawal of advances and withdrawal from CPF for specific purposes. Also, similar to GPF Rules, the CPF guidelines allow Deposit Linked Insurance Revised Scheme.