Public provident fund (PPF), small deposits and post office schemes will fetch a higher rate of return from December.
The government today notified an increase in interest rates on PPF to 8.6 per cent from 8 per cent, and raised the ceiling on annual contributions to the fund to Rs 1 lakh from Rs 70,000.
Interest rates on savings accounts in post offices will go up to 4 per cent from 3.5 per cent. Rates on deposits of other maturities, too, will be raised from next month.
The sale of Kisan Vikas Patras (KVP) will be discontinued from November 30.
The maturity period of monthly investment schemes (MIS) and National Savings Certificates will be reduced to five from six years.
MIS will earn an interest of 8.2 per cent, but accounts opened on/after December 1 will not be entitled for bonus.
Further, every Rs 100 invested in an NSC will fetch Rs 150.90 at the end of five years.
Besides, loans taken from PPFs will attract an interest of 2 per cent per annum from December.
The government has done away with the commission paid to the agents for opening PPF accounts and Senior Citizens Savings Schemes, while the commission for Mahila Pradhan Kshetriya Bachat Yojana has been fixed at 4 per cent. The commission for all other schemes has been halved to 0.5 per cent.
The Centre has also notified an increase in the interest rate on recurring deposit schemes of post office. According to the calculation, a recurring deposit of Rs 10 every month will fetch Rs 738.62 after five years.
