Post Office Deposit & Interest Rate

  Post Office deposits are giving tough fight to Banks as far public deposit is concern in the country despite post office is doing business in limited environment, but banks has liberal hands to lure public and they keep on revising interest rates on to their different accounts hence able to snatch post office business as stats reveal that due to increase of interest rate by banks public deposit in post office small savings accounts is shrinking which effecting government also as it uses the money, not only rural areas of the country but also citizen of urban areas prefer to opt for post office schemes courtesy half a million agents attached with post office small savings deposits. Government of India was considering from quite some time to make post office deposits more lucrative by increasing interest rate comparatively to its major competitor that is banks and as per information recently proposal has been sent to Finance Minister to look into this matter generously and increase the interest rates on post office small savings.

    Recently proposal forward to finance Minister Mr. Pranab Mukherjee which contain recommendations to make post office deposit more attractive by increasing the interest rates as it is losing its shine among the public that’s is why they are switching to banks for depositing money because there is significant downfall registered, so to give boost to post office deposits, below are some major points in the proposal –

·        Increase interest rates on post office deposit schemes

·        Ceiling on PPF deposit should widen from present 70,000 rupees to 1,00,000 rupees

·        End Kisan Vikas Patar

·        Reduce the commission of agents, but it is getting opposition from agents, they spread all across the country and as per rough estimates they are five lakhs in numbers

   If proposal of increasing interest rates on post office small savings deposit accepted by government of India then it will be a good news for multi crore account holders as it was demanded by them for quite a long time now, soon it will be a reality, more over banks are giving interest rates on their deposits ten or more then ten percent, so in such condition it was hard for post office small saving deposits and agents to stand against banks and snatch business.

   Soon post office small savings account holders will get pat on their back from government of India, it will help both Government of India and account holders because Government of India use deposit money and account holder will get more interest rates, so one can say that it will be a win win situation for both the parties.