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Journalism of Courage
The government has raised the savings limit for small schemes to draw more investors. Individuals can now invest Rs 4.5 lakh instead of Rs 3 lakh in the post office monthly income account. Investors have been increasingly keeping away from such schemes, considered the largest savings avenue for the salaried class. The scheme was popular until about two years ago before the government withdrew the 10% bonus paid on maturity. The 50% rise in annual subscription limit is also applicable to joint accounts, where the cap has been raised to Rs 9 lakh from the previous Rs 6 lakh. Investments can also now be made in multiples of Rs 1,500, a significant departure from the earlier system of investing in multiples of Rs 1,000.
The monthly returns from the post office account after tax are just under 8%. The term of the scheme is for six years. The changes have been brought about through a notification issued by the finance ministry this month. A ministry official said on Thursday, “We hope that this will encourage people to invest in such schemes once again.” The official cumulative monthly accretion figures, to be released on Friday, show that investments in national small saving funds have been dropping sharply. Year-on-year figures until June show that the accretion to small savings schemes has come down by 8%.
