Small Saving Scheme:
- Small Savings Schemes are government run social welfare schemes that provide higher interest rate.
- The interest rates of all small saving schemes are revised on a quarterly basis.
- They are fixed on the basis of G-Sec yields of the previous three months.
- Funds collected under SSS are the liabilities of the Union government accounted for in the Public Accounts of India and the government acts like a banker or trustee.
- The scheme is operated through Post offices, Public and Private banks and Small Saving Agent across the country.
The Small Savings Schemes can be grouped as-
- Post office Deposits:
- Post Office Savings Account, Post Office Time Deposits (1,2,3 and 5 years), Post Office Recurring Deposits, Post Office Monthly Account,
- Savings Certificates:
- National Savings Certificate and Kisan Vikas Patra
- Social Security Schemes:
- Public Provident Fund, Senior Citizens Savings Scheme, and Sukanya Samriddhi Account.
Significance of small savings schemes:
- The Small Saving Schemes (SSSs) are important source of household savings in India.
- Small savings schemes are designed to provide safe and attractive investment options to the public and at the same time to mobilise resources for development.
- Small saving schemes helps to support the social security objectives at the same time, helping as a tool of resource mobilization for the government.
National Small Savings Fund (NSSF)
- It was established in 1999 within the Public Account of India for pooling the money from different SSSs. Collections from all small savings schemes are credited to the NSSF.
- The NSSF is administered by the Government of India, Ministry of Finance under National Small Savings Fund Rules, 2001, which is derived from Article 283(1) of the Constitution.
- Withdrawals under small savings schemes by the depositors are made out of this Fund.
- The money in the account are used by the centre and states to finance their fiscal deficit.
- The balance in the Fund is invested in Central and State Government Securities.