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Pay Roll Savings Scheme:

Pay Roll Savings Scheme is an arrangement under which an employee voluntarily authorises the employer to deduct from the salary every month a fixed amount for deposit in various Savings Schemes of the Post office. It was introduced in 1958 in private sector undertakings and extended to Government Offices in May, 1962. The amended section of the Wages Act permits the employers to deduct the agreed amount from the wages/salaries of the employees and invest the same in the National Savings Securities as desired by them under the scheme.

The pay Roll Savings Scheme brings in small savings and forms an ideal source of mopping up small savings from the salaried persons. The arrangement of Pay Roll Savings breaks down the human resistance to save and makes saving easy, smooth and automatic for the employees. The savings becomes the first charge on their income. The whole idea of the scheme is that the depositors (employees) will not have to run to the Post office and stand in the queue but on the basis of their authorisation the amount consented will be regularly deducted from their monthly pay bills and deposited by the cashier of the office in their respective pass books or invested in savings certificates as the case may be. The scheme also helps employer because a thrifty, stable and contended staff is conductive to the efficient working of the establishment.