Friends,
Its a good news for PPF Investors. Now the limit of PPF deposit has been increased to Rs. 1 Lac from Rs. 70,000/-. You will be glad to know that the Interest Rate on PPF has also increased. Now the interest rate on PPF is 8.6% (earlier it was 8%) . Further few more changes has also been proposed in other schemes.we will update effective date as soon as confirmed.
1. PPF Investment limit raised to 100000 from 70000.
2. Interest on PPF account has been raised to 8.6 % from 8 %
3. Interest on loan from PPF raised to 2 % from 1 %.
4. Commission on PPF deposit has been abolished.
5. Committee on Nation Saving Scheme has also recommended above Changes as detailed below.
The Committee recommends an upward revision in the investment limit to `1 lakh.
Committee recommends that the rate of interest on advances against deposits may be fixed at 2 percentage points higher than the prevailing interest rate on PPF (as against 1 per cent at present).
Other Major changes.
1. KVP (Kissan Vikas Patra ) also discontinued.
2. NSC maturity period reduced to 5 years , new NSC with maturity period of 10 years will also be issued
3. Interest on NSC has been increased to 8.4 % from 8 %
4. Interest on Post office savings account raised to 4 % from 3.5 % earlier.
5. Commission to agent on all saving schemes reduced to 0.50 % from earlier 1 %.
6. Commission to agent on PPF and Senior citizen scheme also abolished.
Recommendation of committee on NSC with has been approved by Government.
(i) Two NSC instruments would be available with maturities of 5 years and 10 years;
(ii) The interest rates would be bench marked to 5 year and 10 year government securities;
New interest rate is given below
The rate of interest paid under Post Office Savings Account (POSA) will be increased from 3.5% to 4% p.a. The rate of interest on small savings schemes will be aligned with G-Sec rates of similar maturity, with a spread of 25 basis points (bps) with two exceptions. The spread on 10 year NSC (new instrument) will be 50 bps and on Senior Citizens Savings Scheme 100 bps. The interest rates for every financial year will be notified before 1 st April of that year.
Assuming the date of implementation of the recommendations of the Committee as 1st December, 2011, the rate of interest on various small savings schemes for current financial year on the basis of the interest compounding/payment built in the schemes, will be as given below (See chart)
Payment of 5% bonus on maturity of MIS will be discontinued.
Commission to Agents reduced/Abolished.
Commission to Agents
(i) Payment of commission on PPF schemes (1%) and Senior Citizens Savings Scheme (0.5%) will be discontinued.
(ii) Agency commission under all other schemes (except MPKBY agents) will be reduced from existing 1% to 0.5%.
(iii) Commission at existing rate of 4% will continue for Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) agents.
(iv) Incentives, if any, paid by the State/UT Governments will be reduced from the commission paid by the Central Government.
