Collection through Senior Citizen Saving Scheme (SCSS) has surged to over two times during the current fiscal. At the same time, mobilisation through Monthly Income Scheme has gone up by 4 times.

Also read: Mahila Samman Savings Certificate collected over ₹14,500 crore in 9 months

“As on early February, collection through SCSS was around ₹90,000 crore. It was over ₹37,000 crore during full fiscal of 2023-24. Similarly, collection from Monthly Income Scheme rose to nearly ₹20,000 crore against ₹5,000 crore for full fiscal of 2023-24,” a senior Finance Ministry official said. Further he added that Mahila Samman Saving Certificate, launched during current fiscal has given over ₹19,000 crore till date.

SCSS and MIS are two of small savings schemes, available through Post Office, enjoy sovereign guarantee for principal and interest. The officials attributed the reasons for higher collection as enhancement of limit. The maximum deposit limit for Senior Citizen Savings Scheme has been enhanced to ₹30 lakh from ₹15 lakh and it has been made effective from April 1, 2023. Similarly, under MIS, Maximum investment limit is ₹9 lakh in single account and ₹15 lakh in joint account. Earlier, the limits were ₹4.5 lakh and ₹9 lakh.

Announced last year, Mahila Samman Savings Certificates provides financial advantages to women and encourages them to take charge of their finances and make informed decisions. This scheme is available for two years up to March 2025. This will offer a deposit facility up to ₹2 lakh in the name of women or girls for a tenor of two years at a fixed interest rate of 7.5 per cent with partial withdrawal option.

Small savings schemes

Talking about overall small saving collection, the official said that against the Revised Estimate target of net collection of ₹4.37-lakh crore, the amount mobilised till early February has been ₹2.76-lakh crore which is 64 per cent of RE. However, during the corresponding period (April-early February) of FY 23, the amount was ₹1.91 -akh crore.

The small savings schemes basket comprises 12 instruments including the National Saving Certificate (NSC), Public Provident Fund (PPF), Kisan Vikas Patra (KVP) and Sukanya Samridihi Scheme. The government resets the interest rate at the beginning of every quarter. Theoretically, since 2016, interest rate resetting has been done based on yields of government securities of the corresponding maturity with some spread on the scheme for senior citizens, as advised by the Shyamala Gopinath Committee. However, in practice, the interest rate changes are made considering several other factors, including political ones.

Also read: Post Office Deposits, Senior Citizen Savings Scheme and Public Provident Fund: Are you aware of these recent key changes and how it will impact your savings? 

Now, the next round or interest rate revision is scheduled to take place late last month. When asked will the decision affected by Model Code of Conduct, the official said that due procedure will be followed. Also, when asked will there be upward or downward revision, he did not specify, though indicated that overall interest rates are seeing downward trend.