Small savings schemes to give higher returns now

NEW DELHI: Investors have something to cheer about. After months of delay, the government on Friday accepted the recommendations of a panel which would help investors earn higher interest on small savings schemes such as public provident fund and post office deposits.

An expert panel, headed by former RBI deputy governor Shyamala Gopinath, had recommended moving to a market-linked interest rate system for small savings schemes that would translate into higher returns for now.

The return on the Public Provident Fund ( PPF) scheme in the current fiscal is expected to be 8.6%, up from 8%, while the return on the five-year national savings certificate plan would be 8.4% from 8%.

The government also accepted the panel's recommendation to raise the annual investment ceiling under the popular Public Provident Fund scheme to Rs 100, 000 from the present Rs 70,000. Another popular scheme, the Kisan Vikas Patra, would be discontinued.  Read more