The government on Wednesday cut interest rates on small savings schemes, after keeping them untouched for three straight quarters.

Interest on Public Provident Fund (PPF) has been reduced by 0.7% to 6.4%, making it the lowest in 46 years. This is the first time since 1974 that the PPF interest rate is quoting below 7%.

National Savings Certificate (NSC) will now fetch 0.9% less at 5.9%.

Interest rates on small savings schemes, which are notified on a quarterly basis, have been slashed by up to 1.1% for the first quarter of 2021-22. This is in line with banks dropping interest rates on fixed deposits.

The new rates will come into effect from 1 April.

Post office time deposit rates across tenures have been reduced by 0.40- 1.1% and will earn in the range of 4.4- 5.3%.

Senior Citizens have also not escaped from the drop in interest rates. For the five-year Senior Citizens Savings Scheme, the interest rate has been reduced steeply by 0.9% to 6.5%.

For the first time interest rate on savings deposits has been reduced by 0.5% to 3.5%, from the existing 4% annually.

The interest on the senior citizens' scheme is paid quarterly.

The steepest fall of 1.1% has been in the one-year term deposit. The new rate will be 4.4%, down from the existing 5.5% interest rate.

Similarly, two-year fixed deposit will fetch 0.5% less at 5%, three-year term deposit rate will slide 0.4% and five- ear term deposit rate will shrink 0.9% to 5.8%.

The girl child savings scheme Sukanya Samriddhi Yojana account will earn 0.7% less at 6.9% during the first quarter of the next financial year.

The annual interest rate on Kisan Vikas Patra (KVP) has fallen 0.7% to 6.2%, from 6.9%.

Earlier, in the April-June quarter of 2020-21, the government had slashed rates of small savings schemes by 70-140 basis points.