The rate of interest on Post Office Savings Account (POSA) has been increased from 3.5% to 4%. The ceiling of maximum balance in POSA 1 lakh in single account and 2 lakh in joint account has been removed.
The maturity period for Monthly Income Scheme (MIS) and National Savings Certificate (NSC) has been reduced from 6 years to 5 years.
A new NSC instrument, with maturity period of 10 years, has been introduced.
The annual ceiling on investment under Public Provident Fund (PPF) Scheme has been increased from Rs.70,000 to Rs.1 lakh.
Liquidity of Post Office Time Deposit (POTD) – 1, 2, 3 & 5 years – has been improved by allowing pre-mature withdrawal at a rate of interest 1% less than the time deposits of comparable maturity. For pre-mature withdrawals between 6-12 months of investment, Post Office Savings Account (POSA) rate of interest has been allowed.
The rate of interest on Small Savings Schemes has been aligned with Government-Security rates of similar maturity with a spread of 25 basis points (bps) in all schemes except 10 Years National Savings Certificates (IX-Issue) and Sr. Citizens Savings Scheme where the spread of 50 bps and 100 bps has been given respectively (100 bps are equal to 1%). Interest rate for every financial year will now be notified before 1st April of that year. The Interest Rates of Small Savings Schemes notified from 1.4.2012 are given below:-
|Scheme||Rate of Interest in % w.e.f. 1.4.2012|
|Savings Account Deposit||4.0|
|1 year Time Deposit||8.2|
|2 year Time Deposit||8.3|
|3 year Time Deposit||8.4|
|5 year Time Deposit||8.5|
|5 year Recurring Deposit||8.4|
|5 year Sr. Citizens Savings Scheme||9.3|
|5 year Monthly Income Accounts||8.5|
|5 year National Savings Certificates (VIII-Issue)||8.6|
|10 year National Savings Certificates (IX-Issue)||8.9|
|Public Provident Fund||8.8|