SMALL SAVINGS SCHEMES – POLITY
News:
Despite hikes, small savings scheme rates still to catch up
What's in the news?
● Despite
successive hikes in the interest rates on several small savings instruments
(SSIs) in the last three quarters, the returns on five such schemes are still
significantly lower than what they should have fetched as per the formula
adopted for them.
Key takeaways:
● The
Sukanya Samriddhi Account (SSA) scheme’s
returns, hiked to 8% in this quarter for the first time in four years.
● The
Senior Citizen's savings scheme, which now offers 8.2% — the highest return
among all SSIs.
Shyamala
Gopinath Committee:
● The
formula for small savings rates, recommended by a panel led by former RBI
Deputy Governor Shyamala Gopinath, mandates
a quarterly reset that links their returns to the average quarterly yields
on government securities in the first three of the preceding four months.
Go back to basics:
Sukanya Samriddhi Scheme:
● Sukanya
Samriddhi Scheme is a small saving
scheme under the Government of India targeting the parents of any girl
children.
● This
scheme focuses on encouraging the parents of the female child to build a fund
for their future education and marriage
expenses.
● The
Sukanya Samriddhi Scheme provides an interest
rate of 8.4% and tax benefits to every account opened under it for
July-September 2019.
● The
Sukanya Samriddhi Account can be opened
at any Post office or branch of authorized commercial banks in the country.