Banks to sell more postal schemes

Individuals investing in small saving instruments will now get more avenues to deposit their money.

By Our special correspondent in Mumbai
  • Published 21.10.17
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Mumbai: Individuals investing in small saving instruments will now get more avenues to deposit their money.

The Union government has allowed banks, including the top three private sector lenders, to accept deposits under various small savings schemes such as the National Savings Certificate (NSC), recurring deposits and the monthly income plan.

So far, most of the small savings schemes were sold through post offices. The move is expected to encourage savings and lead to a higher mobilisations of funds as more number of outlets start offering the small savings schemes.

According to a recent government notification, banks can now sell National Savings Time Deposit Scheme 1981, National Savings (Monthly Income Account) Scheme 1987, National Savings Recurring Deposit Scheme 1981 and NSC VIII issue.

According to the notification, all public sector banks and the top three in the private sector - ICICI Bank, HDFC Bank and Axis Bank - can receive subscriptions from the expanded portfolios.

So far, these banks were allowed to receive subscription under the Public Provident Fund (PPF), Kisan Vikas Patra-2014, Sukanya Samriddhi Account and the Senior Citizen Savings Scheme-2004.

Last month, the government had kept unchanged the interest rates on small savings schemes for the October-December quarter.

Since April last year, interest rates on all small saving schemes are being recalibrated on a quarterly basis.

While the PPF scheme now fetches an annual return of 7.8 per cent, Kisan Vikas Patra (KVP) yields 7.5 per cent and matures in 115 months.

The Sukanya Samriddhi Account Scheme for the girl child offers 8.3 per cent annually. The 5-year Senior Citizens Savings Scheme yields 8.3 per cent.