Interest rates on small savings schemes may go up by 0.25%
The government is likely to hike the interest rates on deposit schemes
offered by post offices, like savings account, Monthly Income Scheme
(MIS), Public Provident Fund (PPF), etc by about 0.25 per cent from
April 1.
A circular on revised interest rate on small savings scheme will be
issued by March 28, official sources said, adding that there could be a
0.25 basis points hike in the rates.
"We are in the process of calculating the rates. The new rates will be applicable from April 1," they added.
The government had in December, 2011 hiked interest rates on post office
savings accounts (POSA) to 4 per cent, from 3.5 per cent. Similarly,
the interest rates on the MIS and PPF was fixed at 8.2 per cent and 8.6
per cent respectively.
The decision to hike interest rates in December was in line with the
recommendations of the Shyamala Gopinath Committee which had suggested
linking of interest rates on small savings with that of the market. The
panel had also suggested that the interest rates on small savings
schemes should be revised annually.
The revision in the interest rates is aimed at maintaining the
attractiveness of the small savings schemes vis-a-vis fixed deposit
schemes operated by banks.
The government, as part of economic liberalisation process, had freed
the interest rates on banks deposits giving freedom to lenders to fix
rates depending upon the asset-liability position, but continued to fix
rates for small savings schemes.
Pursuant to the recommendations of the Gopinath Committee, the government had introduced the
National Savings Scheme (NSC) with a 10-year maturity to attract long-term funds.
The annual investment ceiling in PPF savings was increased to Rs 1 lakh from Rs 70,000.
Source:- The Economic Times
