Call Us Now

+91 9606900005 / 04

For Enquiry

Small Savings Schemes


Recently, the government kept interest rates unchanged on Small Savings Schemes, including NSC (National Savings Certificate) and PPF (Public Provident Fund), for the second quarter of 2022-23 amid high inflation and rising interest rate.

  • The interest rate on small savings schemes has not been revised since the first quarter of 2020-21.


GS III- Indian Economy

Dimensions of the Article:

  1. About Small Saving Schemes/Instruments
  2. What are the different saving schemes?

About Small Saving Schemes/Instruments

  • They consist of 12 instruments and are the main source of household savings in India.
  • Depositors receive a guaranteed interest rate on their funds.
  • They are popular as they provide returns higher than bank fixed deposits, sovereign guarantee and tax benefits.
  • The National Small Savings Fund receives payments from all small savings instruments (NSSF).
  • Small savings have become a crucial source of funding the government deficit, particularly when the Covid-19 outbreak caused the deficit to inflate and further borrowing became necessary.
Determination of Rates:
  • Interest rates on small savings schemes are reset on a quarterly basis, in line with the movement in benchmark government bonds of similar maturity. The rates are reviewed periodically by the Ministry of Finance.
  • The Shyamala Gopinath panel (2010) constituted on the Small Saving Scheme had suggested a market-linked interest rate system for small savings schemes.

What are the different saving schemes?

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).

-Source: Indian Express

March 2024