Get more returns in Government savings and investments schemes

There is a good news for all the investor. On Friday, Finance Minister of India Pranab Mukherjee  approved major changes in the National Small Savings Fund (NSSF) and post office savings schemes to make these more attractive to investors and bring their rates almost at par with bank fixed deposits.

Now the investor can earn higher on small savings like the scheme of Post office saving account, Public provident fund etc. The government last July set up a committee headed by the Reserve Bank of India’s then deputy governor Shyamala Gopinath to review the structure of NSSF, including deregulation of interest rates. Because of the following recommendation the major changes has taken into consideration.

Major changes in the policy: 

What has been Added ? 

  • The government has raised the rate of interest on small saving scheme
  • Public provident fund annual ceiling fund increases from Rs. 70,000 to Rs. 1,00,000 and the rate of interest to go up from 8% to 8.5%.
  • The interest rate for post office savings accounts has been raised from 3.5% to 4%.
  • The maturity period of the monthly income scheme and National Saving Certificates (NSC) has reduced  from six years to five years.
  • One new policy of National Saving certificate with 10 years maturity has to be introduced and it will offer a return of 8.7%. However,  the policy of  National saving certificate with 5 year maturity offer rate of interest of 8.4% instead of 8% at present.

What is Removed:  ?

  • One of the major change in the policy is that the government has accepted to remove the Kisan Vikas Patras which is a popular cash certificate.
  • The government has removed the commission of most agent for small saving scheme. This means agent will earn no more commission on these schemes.
  • Rate of interest on loan taken from public provident fund has raised from 1% to 2%.
  • The policy of giving 5% bonus on maturity of MIS to be removed.
  • Premature withdrawl from post office time deposit  can now be withdrawn before maturity with a penalty of 1%, a measure intended to improve liquidity.

So what do you thing about these changes?Will it proves helpful for the normal people of the country.
Share your view with us.


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