In order to encourage savings, the Centre has allowed banks, including top three private sector lenders, to accept deposits under various small savings schemes such as National Savings Certificate (NSC), recurring deposits and monthly income plan.
Until now, most of the small savings schemes were sold through post offices.
According to a recent government notification, banks can also sell National Savings Time Deposit Scheme 1981, National Savings (Monthly Income Account) Scheme 1987, National Savings Recurring Deposit Scheme 1981 and NSC VIII issue.
As per the notification, all public sector banks and top three in the private sector — ICICI Bank, HDFC Bank and Axis Bank — to receive subscription from the expanded portfolios.
So far, these banks were allowed to receive subscription under Public Provident Fund, Kisan Vikas Patra-2014, Sukanya Samriddhi Account and Senior Citizen Savings Scheme-2004.
Last month, the government kept unchanged interest rates on small savings schemes for the October-December quarter Since April last year, interest rates on all small saving schemes have been recalibrated on a quarterly basis.
Investments in the public provident fund (PPF) scheme will fetch annual rate of 7.8 per cent while Kisan Vikas Patra (KVP) investments will yield 7.5 per cent and mature in 115 months.
The one for girl child savings, Sukanya Samriddhi Account Scheme will offer 8.3 per cent annually. Similarly, the investment on 5-year Senior Citizens Savings Scheme will yield 8.3 per cent and is paid quarterly.
On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis since April 1, 2016, the Finance Ministry said while notifying the rates for third quarter of financial year 2017-18.