8.7% interest on new post office savings scheme
The government will introduce a new post office savings scheme of 10-year maturity effective from Dec 1 that will earn annual compound interest rate of 8.7 percent.
The finance ministry Tuesday issued notification for launch of new savings instrument - "10-year national savings certificate, 2011".
"Investments in certificate will earn interest at the rate of 8.7 percent per annum, compounded semi-annually," an official statement said.
The certificate will be available in the denominations of Rs.100, Rs.500, Rs.1,000, Rs.5,000 and Rs.10,000. There is no upper limit for investment in the scheme.
National savings certificate is a popular saving instrument for people who invest to save tax.
Under the new scheme, on investment of Rs.100, the depositor will get Rs.234.35 after 10 years on maturity of the certificate.
The certificate is easily transferable. It can be transferred from a post office where it is registered to any other post office and it can be pledged as a security.
The government has introduced the new scheme on recommendation of a committee headed by Shyamala Gopinath, then deputy governor of Reserve Bank of India. The committee has recommended a comprehensive review of the national small savings funds.