Govt Lifts Up Interest Rates Of Small Savings

[cherry]

There is good news for individuals making investment in small saving plans like Post office time deposits, National Saving Certificates (NSC) or Public Provident Fund (PPF).

The Finance Ministry has lifted up the rates of interest about half a percentage point for 2012-13 on a range of small saving plans.

However, regardless of this augmentation, rates on the small savings are still below than rate of interest on bank deposits.

The average rate on bank deposits with changing maturity is 8.5 to 9.25%.

The fresh interest rates on small savings (apart from 5-year senior citizen saving plans) would be between 8.2 to 8.9%.

The Ministry of Finance stated that the novel rates of interest will get effective from April 1, 2012.

The interest rates have been refreshed on the basis of alteration in the rates on Government Securities.

This has been made on the suggestions constituted by the Shyamala Gopinath Committee.

People investing in one-year time deposits will gain the most, as the rate here has gone up by maximum of half percentage point, while NSC and PPF depositors will benefit by 20 basis points. There has been no change on savings deposits without any fixed maturity.

As per the revised approximation presented in the financial plan, the net outflow is expected to be more than Rs 10,000 crore in 2011-12.

By the coming financial, the Finmin approximates there will be net inflow of around Rs 1,200 crore.

[Rupali]

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