Modifications to Public Provident Scheme
The Central Government is actively considering the recommendations by a special Review Committee to increase the deposit limit for Public Provident Fund (PPF) from Rs. 70 thousand to Rs. 1 Lakh. Also, if you take a loan from PPF Account, the interest is going to be 2 % as against the present interest rate of 1 %.
A Committee on Comprehensive Review of National Small Savings Fund (NSSF) headed by Deputy Governor, RBI has recommended revision of certain provisions of PPF Scheme, 1968 and benchmarking of interest rates on various small savings schemes with the secondary market yields on Central Government securities of comparable maturities with suitable spread.
The Committee has recommended increasing the deposit limit under PPF Scheme from existing Rs. 70,000 to Rs. 1 lakh per annum and fixing of rate of interest on advances against deposits in PPF scheme at 2 percentage points as against the prevailing interest rate on such advances at 1%.
The Committee has further recommended benchmarking interest rate on small saving schemes to interest rate on Government securities of similar maturities with a positive spread of 25 basis points on all schemes except for 50 basis points for 10 year NSC and 100 basis point for Senior citizens Savings Scheme. Recommendations of the Committee have been referred to State Governments and concerned Ministries/ Departments of Central Government for their comments.
All the above information were given by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a question raised in Rajya Sabha.