Interest Rates on Small Saving Schemes

Interest Rates on Small Saving Schemes

Part of: GS Prelims and GS-III – Economy

In news

• Government may reduce interest rates on small saving schemes for the July – September Quarter.
• A cut in small savings rates at this point would further hurt households amid increase in inflation.

About Small Saving Schemes/Instruments

• They are the major source of household savings in India and comprises 12 instruments.
• The depositors get an assured interest on their money.
• Collections from all small savings instruments are credited to the National Small Savings Fund (NSSF).
• Small savings have emerged as a key source of financing the government deficit.

Small savings instruments can be classified as

• Postal Deposits comprising savings account, recurring deposits, time deposits of varying maturities and monthly income scheme.
• Savings Certificates: National Small Savings Certificate (NSC) and Kisan Vikas Patra (KVP).
• Social Security Schemes: Sukanya Samriddhi Scheme, Public Provident Fund (PPF) and Senior Citizens‘ Savings Scheme (SCSS).