There is some good news for investors who invest in public provident fund scheme. The government of India has increased interest rates on deposit schemes offered by post offices, like savings account, Monthly Income Scheme and Public Provident Fund.
While post office savings accounts (POSA) will fetch 4 per cent interest, up from 3.5 per cent, the Monthly Income Scheme (MIS) will earn an interest of 8.2% and the Public Provident Fund (PPF) will earn an interest of 8.6%, a government release said on November 11, 2011.
The new rates will be applicable from the date of notification which will be announced soon. (update: PPF will get higher return from December 1, 2011)
The annual investment ceiling in PPF savings has been increased to Rs 1,00,000 from the present limit of Rs 70,000. Commission on PPF deposit has been abolished.
Interest on loan from PPF raised to 2 % from 1 %.