Returns on small savings is set to dip in next fiscal
By Neelima Shankar
Mar 13, 2013
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Small savings in post office and PPF instruments might fetch less return in the new financial year. The Finance Ministry will be announcing the new rates for Post offices Savings Schemes, National Savings Schemes (NSC) and Public Provident Fund (PPF) on April 1.

The new rates will now be aligned to the rates on government bonds of similar maturities with a spread of 25 basis points. But there are two exceptions. The spread on the 10-year NSC and the Senior Citizens Savings Scheme would be 100 basis points.

There had been two hikes in interest rates earlier, one effective from December 1, 2011, and the other effective from April 1, 2012.

However, the existing rates on one and five year time deposits and five year NSC are still less than the 8.75 per cent offered by the State Bank of India on similar maturities.

In the financial year 2013-14, the rates of interest will be determined on the basis of annualized yield of 2012 on the benchmark government securities.


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