mumbai for investors battered by high inflation and flat returns from stocks and mutual funds the hike in interest rate on small saving schemes is a bonanza of sorts the biggest gainers will be account holders of public provident fund ppf which now comes with the double benefit of higher interest rate 86 and higher annual investment limit rs 1 lakhexperts say the hike in interest rate has made the ppf the best option for conservative investors if a couple starts contributing rs 1 lakh every year they can together build a taxfree corpus of rs 618 lakh over 15 years however this assumes the rate will remain steady at 86 a very unlikely scenario considering the rate is linked to the yield of government bonds analysts believe the interest rate cycle is close to peaking out and rates could go down in the coming months see tablethe raising of the annual limit from rs 70000 to rs 1 lakh will benefit investors looking to park money in taxfree avenues the rs 2580 interest earned on the additional investment of rs 30000 will escape the tax net every year whats more if the investor claims tax benefits under section 80c his effective return will be close to 1653the revised rates for small savings are only for this fiscal and the new rates will be announced at the beginning of every financial year if the ppf rate is 86 in the first year but subsequently drops to 76 the corpus at the end of 15 years would be smaller by about rs 97500 than what it would earn under the 8 offered till now if you want to make the most of your ppf account be disciplined and contribute every year and do not take loans from the account says sumeet vaid founder freedom financial plannersafter the initial 15 years one can keep extending the deposit for 5 years at a time he adds while the ppf has become more attractive the new improved nsc with an interest rate of 84 but a reduced tenure of five years may not find favour with many investors banks are offering up to 995 on 5year tax savings fixed depositsthe state bank of india offers 925 on such deposits similarly fixed deposit and savings bank accounts of the post office despite the increased rates are not attractive because banks offer better rates besides it is easier to withdraw money from a bank thanks to atms and their wider reachmore details on changes in small savings schemes in nov 21 issue of et wealth