The government on Monday increased interest rates on a range of popular post-office saving schemes. While returns on post office savings accounts (POSA) have been retained at 4% interest per annum, the monthly income scheme (MIS) and public provident fund (PPF) will earn interest of 8.5% and 8.8%, respectively, up from the current 8.2% and 8.6%, a government release said. The new rates come into effect April 1.
The newly-introduced National Savings Scheme (NSC) with 10-year maturity will fetch 8.9% against the existing 8.7%. Interest on time deposits of one and two years is up 0.5 percentage points to 8.2% and 8.3%, respectively.
Middle-class Indians rely on these small-investment options for social security and parking surplus money while the government dips into this pool to finance its budget.