The central government has increased the rate of interest for General Provident Fund (GPF) and other related schemes by 0.4 percentage points to 8 per cent for the October-December quarter. The interest rate on GPF was 7.6 per cent for the July-September quarter of 2018-19. The rate hike is in line with that of Public Provident Fund (PPF) schemes, for which the Centre hiked interest rates on September 20. “… during the year 2018-2019, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8 per cent with effect from October 1, 2018, to December 31, 2018,” a Department of Economic Affairs’ notification said.

The interest rate would apply on Provident Funds of central government employees, railways and defence forces. Other funds eligible for the benefit include 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, and the Armed Forces Personnel Provident Fund.

Keeping in mind the rising deposit rates in the banks, the interest rates for small savings schemes, including National Savings Certificate (NSC) and Public Provident Fund (PPF), were increased by up to 0.4 per cent for the October-December quarter. Interest rate for the five-year term deposit, recurring deposit Senior Citizens Savings Scheme were raised to 7.8, 7.3 and 8.7 per cent, respectively.