Retail investors back to small savings schemes

Small savings schemes have again become attractive for retail investors thanks to the fall in bank deposit interest rates last year.

After two successive years of negative growth in the net collections during 2007-2008 and 2008-2009, the schemes witnessed a positive growth in 2009-2010, when around Rs.1,539 crore was mobilised.

This year, as on July 31, 2010, the figure for net collections was Rs.310.71 crore, according to a release on Thursday.

A senior official of the Small Savings Directorate says that unlike bank interest rates, the rates of small savings schemes had remained stable since March 2003.

For the current year, the State government has earmarked Rs.25 crore towards incentive payment to agents of small savings schemes. As of now, a sum of around Rs.10.6 crore had been distributed to all districts, the release said.

A. Rahman Khan, Vice-Chairman of the State Advisory Committee, released a compact disc containing promotion content of the small savings schemes, here on Thursday.