Revision in Post Office Savings Schemes

Planning

oi-Monika

By Monika Nihalani

Published: Friday, December 2, 2011, 9:50 [IST]

The Central Government has made some key changes to the Post office Small Savings Schemes. The revision in the Schemes and interest rates was in response to Reserve Bank of India (RBI’s) announcement on complete deregulation of savings banks deposit rates in the recent mid-year review of money policy and also with the recommendations of former RBI deputy governor Shayamala Gopinath Committee that submitted its report to Union Finance Minister Pranab Mukherjee on June 7th this year.

The key changes are as follows –

1. Post Office Savings Account interest rate raised to 4 % (from existing 3.5% per annum).

2. PPF:

• Interest rate raised to 8.6% (from existing 8% per annum);
• Maximum Investment limit raised to Rs 1 lakh (from existing Rs 70,000 per annum).

3. Kisan Vikas Patra (KVP) discontinued.

4. New Issue of National Savings Certificate (NSC) would be launched with a 10-year maturity with an interest rate of 8.7% (per annum); maturity term reduced to 5 years (from existing maturity term of 6 years).

5. The maturity term of Monthly Income Scheme (MIS) of post office and NSC will now be 5 years rather than 6 years earlier.

6. There has been no change in Senior Citizens Savings Scheme;
The dates from which the new rules and rates would be applicable is yet to be disclosed.

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