Small savings schemes are designed to provide safe and attractive investment options to the public. These schemes are primarily meant for small urban and rural investors and institutions are not eligible to invest in major small savings schemes. Non-Resident Indians (NRIs) are also not eligible to invest in small savings schemes including Public Provident Fund (PPF) and Deposit Schemes for Retiring Employees.
Small savings schemes are designed to provide safe & attractive investment options to the
public and at the same time to mobilise resources for development.
The providers of small savings schemes want to achieve this by providing the common people with investment options that offer high returns without high risk. There are various ways in which the small saving schemes of India are run.
- Any individual can open an account.
- Cheque facility available.
- Group Account, Institutional Account, other Accounts like Security Deposit account & Official Capacity account are not permissible
- Rate of interest 4% per annum
- Senior Citizen Savings Scheme Accountis made for Senior Citizen
Investors who desire for long-term investment with steady returns opt for investment in a PPF. The fund provides 8-9% per annum. The scheme is distributed over 15 years and an investor is required to pay annual contributions every year for ensuring the commitment towards the scheme.
The minimum amount to be contributed is Rs. 500 per year. Withdrawals are permitted only after 6 years from the end of the financial year in which the first deposit was made. The amount available on such withdrawal shall be equivalent to the amount reflected as the balance in the PPF account over the years in which contributions were made.
I another attractive instrument offering a return of 8% pa. Investors are required to make a single deposit and the interest component is returned along with the principal amount on maturity. NSC has an edge over its peers on account of a relatively lower tenure
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