- Small savings instruments can be classified under three heads.
- These are:
- Postal deposits
- Savings certificates [(National Small Savings Certificate VIII (NSC) and Kisan Vikas Patra (KVP)]; and
- Social security schemes [(public provident fund (PPF) and Senior Citizens ‘Savings Scheme (SCSS)].
- All small savings collections are credited to this National Small Savings Fund (NSSF) in the Public Account of India. The interest rates are reset every quarter based on the G-Sec yields of the previous three months.
- A certain amount of NSSF is invested in the Central and State Government securities. The fund is administered by Department of Economic Affairs, Ministry of Affairs.
Mahila Samman Savings Certificate, 2023
Union Budget 2023-24 announced a one-time new small savings scheme, Mahila Samman Savings Certificate which will be made available for a two-year period up to March 2025. This will offer deposit facility up to Rs 2 lakh in the name of women or girls for a tenor of 2 years at fixed interest rate of 7.5% with partial withdrawal option. To operationalise this scheme, Department of Economic Affairs has now notified the Mahila Samman Savings Certificate Scheme.
- Application for opening an account: Application for opening an account under MSSC Scheme shall be made by a woman for herself, or by her guardian on behalf of a minor girl on or before 31st March, 2025. The account will be single holder type account.
- Deposits: A maximum limit of two lakh rupees can be deposited in an account or accounts held by an account holder. An individual may open any number of accounts subject to maximum limit for MSSC and time gap of three months shall be maintained between existing account and opening another account. Minimum amount for opening an account is thousand rupees and any sum in multiples of one hundred rupees and no subsequent deposit shall be allowed in that account.
- Interest: Deposits made under this scheme shall bear interest rate of 7.5% per annum compounded on quarterly basis.
- Payment of maturity: Deposit shall mature on completion of two years from the date of deposit.
- Withdrawal from account: Account holder shall be eligible to withdraw maximum up to 40% of Eligible Balance once after expiry of one year from the date of opening of account but before maturity of account.
- Premature closure of account: The account can be closed prematurely only after completion of 6 months since the opening of account in the following cases:
- Death of account holder
- If post office or bank concerned is satisfied, in cases of extreme compassionate grounds such as medical support in life threatening diseases, death of guardian.
- Administrative control of the scheme: Department of Economic Affairs under Ministry of Finance has notified Mahila Samman Savings Certificate Scheme, 2023 under the Government Savings Promotion Act, 1873.
Changes related to old age in Budget 2023-24
- Maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs 15 lakh to Rs 30 lakh.
- Maximum deposit limit for Monthly Income Account Scheme will be enhanced from Rs 4.5 lakh to Rs 9 lakh for single account and from Rs 9 lakh to Rs 15 lakh for joint account.