Small Savings Instruments:
The central government withdrew its orders of reducing the rates on all small savings instruments/schemes.
- Small savings instruments help individuals achieve their financial goals over a particular period.
- They are the major source of household savings in India.
- The small savings instrument basket comprises 12 instruments.
- Collections from all small savings instruments are credited to the National Small Savings Fund (NSSF).
- Small savings instruments can be classified under three heads:
- 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).
- Rates of Small Saving Instruments:
- The rates for small saving instruments are announced quarterly.
- Theoretically, the rate changes are based on yields of government securities of the corresponding maturity. However, political factors also influence the rate change.
- The Shyamala Gopinath panel (2010) constituted on the Small Saving Scheme had suggested a market-linked interest rate system for small savings schemes.