1. Modi government backs small savings, allows banks to sell more schemes like NSC, recurring deposits

Modi government backs small savings, allows banks to sell more schemes like NSC, recurring deposits

In order to encourage savings, the government has allowed banks, including top three private sector lenders, to accept deposits under various small savings schemes like National Savings Certificate (NSC), recurring deposits and monthly income plan.

By: | New Delhi | Published: October 20, 2017 6:39 PM
small savings, small savings schemes, government nod to small savings scheme, government permission on small savings schemes Increased outlets for selling small savings scheme would result in higher mobilisation under the scheme. (Associated Press)

In order to encourage savings, the government has allowed banks, including top three private sector lenders, to accept deposits under various small savings schemes like National Savings Certificate (NSC), recurring deposits and monthly income plan. Until now, most of the small savings schemes were sold through post offices. According to a recent government notification, banks can also sell National Savings Time Deposit Scheme 1981, National Savings (Monthly Income Account) Scheme 1987, National Savings Recurring Deposit Scheme 1981 and NSC VIII issue. As per the notification, all public sector banks and top three in the private sector — ICICI Bank, HDFC Bank and Axis Bank — to receive subscription from the expanded portfolios. So far, these banks were allowed to receive subscription under Public Provident Fund, Kisan Vikas Patra-2014, Sukanya Samriddhi Account, Senior Citizen Savings Scheme-2004. Increased outlets for selling small savings scheme would result in higher mobilisation under the scheme.

Last month, the government kept unchanged interest rates on small savings schemes for the October-December quarter. Since April last year, interest rates on all small saving schemes have been recalibrated on a quarterly basis. Investments in the public provident fund (PPF) scheme will fetch annual rate of 7.8 per cent while Kisan Vikas Patra (KVP) investments will yield 7.5 per cent and mature in 115 months. The one for girl child savings, Sukanya Samriddhi Account Scheme will offer 8.3 per cent annually. Similarly, the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent. The interest rate on the senior citizens scheme is paid quarterly.

On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis since April 1, 2016, the ministry said while notifying the rates for third quarter of financial year 2017- 18.

  1. K
    K.Mundanad
    Nov 1, 2017 at 7:41 am
    This refers to the statement: "the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent." NDA regime has meted out a step-motherly treatment to senior citizens. It may be recalled that, when SCSS was commenced in 2004, interest rate on 5 year deposit with public sector banks (PSBs) had nose-dived to around 6 per cent per annum. Concerned with the plight of senior citizens, who were already reeling under runaway inflation, the then finance minister, P. Chidambaram, had provided some succor to them, which should not have been taken away by NDA. It has steeply reduced the interest rate from 9.30 per cent to 8.60 per cent per annum, from 1st April, 2016. The rate was reduced again to 8.50 per cent, with effect from 1st October, 2016 and now to 8.30 percent. Over to Modi.
    Reply
    1. J
      Jessica
      Oct 20, 2017 at 8:36 pm
      Request the government of Karnataka we can't afford to pay high rents and everything is so expensive we get a ry of 10 thousand and demanded to pay 20,000 a month how could we afford this.please do help us.
      Reply

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