What is Saving and Its Definition

7/27/2019 What is Saving and Its Definition

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WHAT IS SAVING AND ITS DEFINITIONSaving is income not spent, or deferred consumption. Methods of saving include

putting money aside in a bank orpension plan.[1] Saving also includes reducing

expenditures, such as recurring costs. In terms ofpersonal finance, saving specifies

low-risk preservation of money, as in a deposit account, versus investment,

wherein risk is higher.

There is some disagreement about what counts as saving. For example, the part of

a person's income that is spent on mortgage loan repayments is not spent on

present consumption and is therefore saving by the above definition, even though

people do not always think of repaying a loan as saving. However, in the U.S.

measurement of the numbers behind its gross national product (i.e., the National

Income and Product Accounts), personal interest payments are not treated as

"saving" unless the institutions and people who receive them save them.

"Saving" differs from "savings." The former refers to an increase in one's assets, an

increase in net worth, whereas the latter refers to one part of one's assets, usually

deposits in savings accounts, or to all of one's assets. Saving refers to an activity

occurring over time, a flow variable, whereas savings refers to something that

exists at any one time, a stockvariable.
http://en.wikipedia.org/wiki/Pensionhttp://en.wikipedia.org/wiki/Saving#cite_note-0http://en.wikipedia.org/wiki/Saving#cite_note-0http://en.wikipedia.org/wiki/Saving#cite_note-0http://en.wikipedia.org/wiki/Personal_financehttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Gross_national_producthttp://en.wikipedia.org/wiki/National_Income_and_Product_Accountshttp://en.wikipedia.org/wiki/National_Income_and_Product_Accountshttp://en.wikipedia.org/wiki/Stock_and_flowhttp://en.wikipedia.org/wiki/Stock_and_flowhttp://en.wikipedia.org/wiki/Stock_and_flowhttp://en.wikipedia.org/wiki/Stock_and_flowhttp://en.wikipedia.org/wiki/National_Income_and_Product_Accountshttp://en.wikipedia.org/wiki/National_Income_and_Product_Accountshttp://en.wikipedia.org/wiki/Gross_national_producthttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Personal_financehttp://en.wikipedia.org/wiki/Saving#cite_note-0http://en.wikipedia.org/wiki/Pension


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Saving is closely related to investment. By not using income to buy consumer

goods and services, it is possible for resources to instead be invested by being used

to produce fixed capital, such as factories and machinery. Saving can therefore be

vital to increase the amount of fixed capital available, which contributes to

economic growth.

However, increased saving does not always correspond to increased investment. If

savings are stashed in a mattress or otherwise not deposited into a financial

intermediary like a bank there is no chance for those savings to be recycled as

investment by business. This means that saving may increase without increasing

investment, possibly causing a short-fall of demand (a pile-up of inventories, a cut-

back of production, employment, and income, and thus a recession) rather than to

economic growth. In the short term, if saving falls below investment, it can lead to

a growth ofaggregate demand and an economic boom. In the long term if saving

falls below investment it eventually reduces investment and detracts from future

growth. Future growth is made possible by foregoing present consumption to

increase investment. However savings kept in a mattress amount to an (interest-

free) loan to the government or central bank, who can recycle this loan.

In a primitive agricultural economy savings might take the form of holding back

the best of the corn harvest as seed corn for the next planting season. If the whole

crop were consumed the economy would deteriorate to hunting and gathering thenext season.
http://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Fixed_capitalhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Recessionhttp://en.wikipedia.org/wiki/Aggregate_demandhttp://en.wikipedia.org/wiki/Aggregate_demandhttp://en.wikipedia.org/wiki/Recessionhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Fixed_capitalhttp://en.wikipedia.org/wiki/Investment


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DESCRIPTION OF SAVING INSTITUTIONS

Savings institutionA financial intermediary established to promote thrift by accepting savings

from the public. Savings institutions include both savings and loan

associations and savings banks. Savings institutions are also called thrift

institutions.

NATIONAL SAVING INSTITUTE(NSI)

NSI is an Institute working under Union Ministry of Finance, Department of Economic

Affairs, Government of India. It is entrusted with the task of mobilization of small savings.

The Institute discharges this role through national level publicity of small savings with feed

back to the ministry for policy intervention and redressal of customer's queries and

grievances.

NSI to be a dynamic, vibrant, high tech, result-oriented organisation and a centre of excellence in thearea of Small Savings.

To inculcate the habit of thrift and saving among the people. To improve the access of small investor to secure avenues of saving through provision of

various savings instruments.

To facilitate provision of efficient services to the investors in Small Savings schemes throughcoordination with the different agencies involved in the implementation of these schemes.


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Scheme Interest Payable/

Periodicity

Denomination &

Investment Limit

Salient Features

Including Tax

Concession

Kisan Vikas

Patra

Money doubles in 8 yr & 7

months. Facility for

premature encashment asper the table given below

for Rs. 1000/- denomination

certificate

Period

2 yrs 6 months or more but

less than 3 years

3 yrs or more but less than

3 years 6 months


less than 4 years

4 yrs or more but less

than 4 years 6 months


less than 5 years


5 years 6 months


less than 6 yrs.


6 yrs 6 months.

6 years 6 months or more

but less than 7 yrs.


7 yrs 6 months


less than 8 yrs.


8 yrs 7 months

No limit on investment. Available in

denomination of Rs. 100/- Rs. 500/-

Rs. 1000/- Rs. 5000/- , Rs. 10,000/-in all Post Offices and Rs. 50,000/-

in all Head Post Offices

Amount Payable inclusive of

interest

1170.51

1207.95

1267.19

1310.80

1355.90

1435.63

1488.49

1543.30

1649.13

1713.82

A single holder type

certificate may be

issued to i)an adult forhimself or on behalf of

a minor or to a minor;

can also be purchased

jointly by two adults
http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=40http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=40http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=40http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=40


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1781.06

1850.93

Post Office

Monthly

Income

Account

8% per annum payable i.e.Rs. 80/- will be paid every

month on a deposit of Rs.12000/-

'A bonus equal to five percent of the amountdeposited, on production ofthe pass-book accompaniedby a written application(withdrawal form) shall bepaid on the deposits made

in new accounts opened onor after the 8th dayof December,2007.'

In multiples Rs. 1500/-Maximum

Rs. 4.5 lakhs in Single account and

Rs. 9 lakhs in joint account.

Maturity period is 6

years. Can be

prematurely encashed

after one year but

before 3 years at the

discount of 2 % of the

deposit and after 3

years at the discount of

1 %

15 Year

PublicProvident

Fund Account

8% per annum

(compounded yearly).

Minimum Rs. 500/- Maximum Rs.

70,000/- in a financial year.Deposits can be made in lump sum

or in 12 installments.

Deposits qualify for

deduction fromincome under Sec-80 Cof I.T. Act. Interest iscompletely tax free.Withdrawal ispermissible every yearfrom 7th financial year.Loan facility availablefrom 3rd financial year.No attachment under

court order.
http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=47http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42http://www.nsiindia.gov.in/uniquepages/singlepage.asp?Id_Pk=42

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What is Saving and Its Definition