Small savings schemes

  • IASbaba
  • January 2, 2023
  • 0
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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)

  1. It is a minimum guaranteed pension scheme mainly targeted at unorganized sector workers.
  2. Only one member of a family can join the scheme.
  3. 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. 1 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3


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