Small savings could fetch higher yield in FY15

Government raises interest rate on small savings scheme by up to 0.2%; kept PPF rate unchanged

Hardening interest rates will have a beneficial impact on the earnings of small  saving schemes. The government has revised upwards or retained interest rates on various small saving schemes for 2014-15, compared  to  those in the current financial year.

Acting on recommendations of the Shyamala Gopinath Committee report on the National Small Savings Fund, the government has linked  these rates to yields on government papers with respective maturities.

While interest  rates on the Public Provident Fund will be retained at 8.7 per cent, National Savings Certificate and savings deposits would fetch the same returns in 2014-15 as in the current financial year. On the other hand, one-to five-year time and recurring deposits will deliver a 0.1 to 0.2 percentage point higher return, an official release stated on Tuesday.