SMALL SAVINGS SCHEME

IN INDIA
Mrs Jugnu Shrivastava
Existing Small Saving Schemes
in India
 Regulated by the Central Government under the
 Government Savings Bank Act, 1873
 Government Savings Certificates Act 1959
 Public Provident Fund Act 1968.
 Deposit Scheme for Retiring Government Employees (1989)
 Deposit Scheme for Retiring Employees of Public Sector
Companies (1991).
 Contractual saving schemes:
 General Provident Fund (GPF),
 Employees Provident Fund (EPF),
 Employees Pension System. All these schemes carry interest rates
administered by the Central Government
POST OFFICE SMALL SAVINGS
SCHEMES
 Post Office Savings Account :
 Post Office Recurring Deposit :
 Post Office Time Deposit :
 Post Office Monthly Income Account:
 PPF 15 year Public Provident Fund Account
 KISAN VIKAS PATRA
 NATIONAL SAVINGS CERTIFICATE
 SENIOR CITIZEN SAVINGS SCHEME
 Pay Roll Savings Scheme 
Post Office Savings Account :

 Minimum INR 50/-. Maximum INR 1,00,000/- for

an individual account. INR 2,00,000/- for joint
account.
 3.5% per annum on individual/ joint accounts.
 Cheque facility available.  Interest Tax Free.
 Post Office Savings Account Rules, with effect from 13th
October, 2009 to allow opening of “Zero Deposit/Zero
Balance” accounts for Old Age Pensioner Account under
Indira Gandhi National Old Age Pension Scheme
Post Office Recurring Deposit :

 On maturity INR 10/- account fetches INR 728.90/-. Can

be continued for another 5 years on year to year basis.
 Rate of interest 7.5% (quarterly compounded).
 Minimum INR 10/- per month or any amount in multiples of
INR 5/-. No maximum limit.
 One withdrawal upto 50% of the balance allowed after one
year. Full maturity value allowed on R.D. Accounts
restricted to that of INR. 50/- denomination in case of
death of depositor subject to fulfillment of certain
conditions. 6 & 12 months advance deposits earn rebate.
 No TDS
Post Office Time Deposit
 Minimum INR 200/- and in multiple thereof. No maximum
limit.
 Account may be opened by individual. 2,3 & 5 year account
can be closed after 1 year at discount. Account can also be
closed after six months but before one year without interest.
The investment under this scheme qualify for the benefit of
Section 80C of the Income Tax Act, 1961 from 1.4.2007.
 Interest payable annually but calculated quarterly.
 Period          Rate
 1 yr. A/c      6.25% 2 yr. A/c      6.50%
 3 yr. A/c    7.25% 5 yr. A/c      7.50%
Post Office Monthly Income Account:

 8% per annum payable i.e. INR 80/- will be paid

every month on a deposit of INR 12000/-.
 In multiples of INR 1500/- Maximum INR 4.5 lakhs
in single account and INR 9 lakhs in joint account.
 Maturity period is 6 years. Can be prematurely
encashed after one year but before 3 years at the
discount of 2% of the deposit and after 3 years at
the discount of 1% of the deposit. (Discount means
deduction from the deposit.) A bonus of 5% on
principal amount is admissible on maturity in
respect of MIS accounts opened on or after 8.12.07.
PPF 15 year Public Provident
Fund Account

 8% per annum (compounded yearly).

 Minimum INR. 500/- Maximum INR. 70,000/- in a
financial year. Deposits can be made in lumpsum or
in 12 installments.
 Deposits qualify for deduction from income under
Sec. 80C of IT Act. Interest is completely tax-free.
Withdrawal is permissible every year from 7th
financial year
 Loan facility available from 3rd Financial year. No
attachment under court decree order.
 Interest earned is completely free from Income Tax under
section 10(a)(i)
KISAN VIKAS PATRA

 Money doubles in 8 years & 7 months. Facility for

premature encashment.
 Rate of interest 8.4% (compounded yearly)
 No limit on investment. Available in denominations
of INR. 100/-, INR. 500/-, INR. 1000/-, INR.
5000/-, INR. 10,000/-, in all Post Offices and INR.
50,000/- in all Head Post Offices.
 A single holder type certificate may be issued to
an adult for himself or on behalf of a minor or to a
minor, can also be purchased jointly by two adults,
Registered Trust.
NATIONAL SAVINGS
CERTIFICATE

 8% Interest compounded six monthly but

payable at maturity. INR. 100/- grows to INR
160.10 after 6 years.
 Minimum INR. 100/- No maximum limit available
in denominations of INR. 100/-, 500/-, 1000/-,
5000/- & INR. 10,000/-.
 Deposits quality for tax rebate under Sec. 80C of
IT Act.
 The interest accruing annually but deemed to be
reinvested will also qualify for deduction under
Section 80C of IT Act.
SENIOR CITIZEN SAVINGS
SCHEME

 9% per annum, payable from the date of deposit of

31st March/30th Sept/31st December in the first
instance & thereafter, interest shall be payable on
31st March, 30th June, 30th Sept and 31st
December
 There shall be only one deposit in the account in
multiple of INR.1000/- maximum not exceeding
rupees fifteen lakh.
 Maturity period is 5 years.
 Premature closure is allowed after one year on
deduction of 1.5% interest & after 2 years 1%
interest
SENIOR CITIZEN SAVINGS
SCHEME

 Age should be 60 years or more, and 55 years or

more but less than 60 years who has retired on
superannuation or otherwise on the date of
opening of account subject to the condition that
the account is opened within one month of
receipt of retirement benefits.
 TDS is deducted at source on interest if the
interest amount is more than INR 10,000/- p.a. 
 The investment under this scheme qualify for the
benefit of Section 80C of the Income Tax Act,
1961 from 1.4.2007.
Pay Roll Savings Scheme 

 Under this scheme, any monthly salaried person

can voluntarily authorise his appointing authority or
employer to deduct monthly contributions from his
salary and to remit into anyone of the savings
schemes like Post Office Recurring Deposit, Post
Office Time Deposit, National Savings Certificate
(VIII issue) and Public Provident Fund Scheme. The
group leader appointed in each organization for
collection purpose is paid 2% commission for his
service who implements the scheme in the
respective concern
National Small Savings Fund:
 All deposits under small savings schemes are
credited to the “National Small Savings Fund”
(NSSF), established in the Public Account of
India with effect from 1.4.1999. All withdrawals
by the depositors are made out of the
accumulations in this Fund
 The liability of outstanding balances under
various small savings schemes at the close of
31st March, 1999 was borne by the Central
Government
Investment of NSSF
 A share of net small savings collections was also
invested in special Central Government securities
during 1999-2000 to 2001-02
 States’ share of net collections (deposits minus
withdrawals by the subscribers) under small
savings schemes in each State and Union Territory
(with legislature) is advanced to the concerned
State/ Union Territory Government as investment
in its special securities and the balance, if any,
invested in special Central Government securities
Reinvestment Provision
 The sums received in NSSF on redemption
of special securities are reinvested in
special Central Government securities and
with effect from 2007-08, the redemption
values can be invested in other
instruments