PPF Scheme INDIA Higher returns of Investment

There is sign of relief and good news for the PPF account holders, small depositors and persons keeping money in the schemes operated by post offices. they will get higher rate of return from December 1, 2011. The government notified increase in interest rates on public provident fund (PPF) to 8.6 per cent from 8 per cent now, and also raised ceiling on annual contributions to the fund to Rs one lakh from Rs 70,000. Interest rates on savings account in post offices would also go up to 4 per cent from 3.5 per cent at present.

Similarly, interest rates on deposits of other maturities too would be raised from December. Further, the sale of Kisan Vikas Patras (KVP) will be discontinued from November 30. There was an apprehension about KVP, which was kind of a bearer instrument, that it was used for money laundering. In addition, the maturity period of monthly investment schemes (MIS) and national savings certificates would be reduced from six to five years. MIS would earn an interest of 8.2 per cent, but accounts opened on/after December 1 would not be entitled for bonus.

The reforms of the small savings schemes were stalled after protest from agents and some political parties. The agents were protesting the reduction in commission paid to them. The implementation of the report will help garner funds for the government from small savings schemes. The increase in the PPF investment ceiling is expected to get a good response from investors, officials said.