Post Office Schemes like PPF & MIS to Offer Better Returns from April 1st 2012

There is a good news for millions of small investors in India as they will be able to earn more from popular post office schemes like Public Provident Fund (PPF) and Monthly Income Schemes (MIS). The government has raised interest rates on these investments by up to 0.5 per cent and this comes into effect from 01 April, 2012.

Post Office Small Saving Schemes

As you might already know, the interest rates on EPF (Employee Provident Fund) was decreased by the govternment and to make up for it, the returns on other small saving schemes like PPF and MIS has been increased.

Also Read: The Benefits of Compounding Returns

This hike in interest rates on small savings schemes are a result of the recommendations made by Shyamala Gopinath Committee which had suggested linking of interest rates on small savings with that of the other instruments available in the market to make these equally attractive to investors. The panel had also suggested that the interest rates on small savings schemes should be revised annually.

Changes in Interest Rates of Small Savings Schemes


  • Interest rates on MIS increased by 0.3 per cent from earlier 8.2% to 8.5%.
  • Interest rates on PPF increased by 0.2 per cent from earlier 8.6% to 8.8%.

Term Deposits

  • Interest rates on Term Deposits of one and two years increased by 0.5% each to 8.2% and 8.3%, respectively.
  • Interest rates for three year Term Deposits increased by 0.4% from 8% to 8.4%.
  • Interest rates on five-year Term Deposit increased by 0.2% from 8.3% to 8.5%.
  • Interest rates on Five-year recurring deposits increased by 0.4% from 8% to 8.4%.

Senior Citizen and NSC

  • Interest rates for Senior Citizens Savings Scheme (SCSS) increased by 0.3% to 9.3% from 9%.
  • The National Savings Certificates (NSC) having maturity of five and ten years increased by 0.2 % each giving 8.6 % and 8.9 %, respectively.

*The new rates come into effect from April 1, 2012 and will remain valid for the entire 2012-13 fiscal.

I believe that this hike in the small savings schemes from the post office will continue to attract more investors and the banks will have to increase the deposit rates to attract investors.

What do you think about this hike in the interest rates on the office. Does this attract you enough to start a small savings scheme with the post office? If you are still thinking about making your first inverstment, you may like to read about the importance of investing and how to get over the fear of investing.

Also Read: How Rs 1 Lakh Grows to Rs 50 Lakhs in 25 Years?

Leave a Comment

Your email address will not be published. Required fields are marked *