The National Small Savings Fund (NSSF) was established by the Union Government in 1999. All small savings collections are credited to the NSSF. Similarly, all small savings withdrawals are made out of the accumulations in this Fund. The balance in the Fund is invested in Union and State Government securities. The investment pattern is as per norms decided periodically by the Union Government.
With effect from December 1, 2011, minimum 50 per cent of the net collections in a State or Union Territory (UT) with legislature are being invested in special securities issued by the concerned State or UT Governments. The remaining fund is invested in Central Government securities or lent to other UT/State governments or in securities issued by infrastructure companies or agencies fully owned by the Central Government.
NSSF is administered by the Department of Economic Affairs, Union Ministry of Finance under the National Small Savings Fund (Custody and Investment) Rules, 2001, framed under Article 283(1) of the Constitution.