In News: Government has increased interest rate on various small savings schemes for the fourth quarter of the current Financial Year starting from 1st January, 2023.
About Small Saving Schemes/Instruments
- Small Savings Schemes are a set of savings instruments managed by the central government with an aim to encourage citizens to save regularly irrespective of their age.
- They are popular as they not only provide returns that are generally higher than bank fixed deposits but also come with a sovereign guarantee and tax benefits.
- 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).
- The rates on these small savings schemes are calculated on the yields on government securities (G-secs).
- 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).
The Sukanya Samriddhi Account
- It was launched in 2015 under the Beti Bachao Beti Padhao campaign
- It is exclusively for a girl child.
- The account can be opened in the name of a girl child below the age of 10 years.
- The scheme guarantees a return of 7.6% per annum and is eligible for tax benefit under Section 80C of the Income Tax Act.
- The tenure of the deposit is 21 years from the date of opening of the account and a maximum of Rs 1.5 lakh can be invested in a year.
Source: News on air
Previous Year Question
Q.1 ) Regarding ‘Atal Pension Yojana’, which of the following statements is/are correct? (2016)
- It is a minimum guaranteed pension scheme mainly targeted at unorganized sector workers.
- Only one member of a family can join the scheme.
- Same amount of pension is guaranteed for the spouse for life after subscriber’s death.
Select the correct answer using the code given below.
- 1 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3