SCHEMES
Worried about the rising cost of living?
There are various schemes cater to diverse investors; many are government-supported, guaranteeing attractive returns. However, interest rates, tax treatment, and lock-in periods vary among various schemes. Therefore, investors should carefully review the options and choose the most suitable one based on their financial goals.
Combining different savings schemes can optimize wealth growth for individuals. Listed down are few such schemes where general public may get benefited:
- National Savings Certificate
- Kisan Vikas Patra
- Sukanya Samriddhi Yojana
- National Pension scheme
- Public Provident Fund
- Post Office Monthly Income Scheme
- Post Office savings account
- Atal Pension Yojana
- Pradhan Mantri Jan Dhan Yojana
- Sovereign Gold Bonds
- Equity Linked Saving Scheme
For certain category of citizens, some special schemes are also floated by Government of India such as
- Senior Citizen Savings Scheme
- Employees Provident Fund Organisation
- Mahila Samman Savings Certificate
- National Savings Recurring Deposit Account
Small savings schemes are the household saving schemes notified by the Central Govt., such as Public Provident Fund, Senior Citizens Savings Scheme, Post Office Recurring Deposit, Sukanya Samriddhi Scheme, etc. The rate of interest on such small saving schemes is notified quarterly.
“Savings Schemes” means the government savings schemes notified by the Central Government to promote household savings in the country. The Government can notify the schemes from Government Savings Promotion Act 1873. The notification may include the provisions relating to who shall be eligible to deposit in a Savings Scheme, the manner of calculation, frequency of payment and rate of interest payable on the deposit, the maximum and minimum limits of deposit, etc.
These schemes guarantee returns with minimal risk and volatility. They can be opened in various ways and start with – monthly, quarterly, half-yearly, and yearly schemes.
Some of these schemes are also eligible for deduction under Section 80C.
Scheme | In whose name the account can be opened | No. of accounts permissible | Rate of Interest | Maturity Period | Investment | Section 80C deductions on deposit i.e. the principal amount invested | Taxability of interest | Whether fixed rate of interest or interest rate can change after the account is opened |
Sukanya Samriddhi Scheme | Girl Child | 1 | 8.4%p.a. | 21 years or date of Marriage | Min.Rs.250 Max.Rs.1.5 lakhs | Allowed | Interest is exempted from tax | Interest rate can change from time to time |
Public Provident Fund (PPF) | Any individual | 1 | 7.9%p.a. | 15 years | Min.Rs.500 Max.Rs.1.5 lakhs | Allowed | Exempt from tax. | Interest rate can change from time to time |
Kisan Vikas Patra (KVP) | Any individual | No limit | 7.6%p.a. (approx.) | 9 years & 5 Months | Min. Rs.1,000 Max. No limit | Not allowed | Resident Indian senior citizens (those aged 60or more) can Claim section 80TT B deduction for interest up to Rs. 50,000. Fully taxable for others. | Fixed interest rate |
Senior Citizen Saving Scheme | Senior Citizens (those aged 60 or more) can open an account with funds from any source. Retirees aged 55or more but less than 60 must Open an account with Retirement benefitsonly. | No limit | 8.6%p.a. | 5years | Min. Rs.1000 Max. Rs.15 lakhs | Allowed | Resident Indian senior citizens (those aged 60or older) can claim sect ion 80TT B deduction for interest upto Rs. 50,000. Fully taxable for others. | Fixed interest rate |
NSC VIII Issue | Any individual | No limit | 7.9%p.a. | 5years | Min. Rs.1,000 Max. No limit | Allowed | Resident Indian senior citizens (those aged 60or older) can claim sect ion 80TT B deduction for interest upto Rs. 50,000. Fully taxable for others. | Fixed interest rate |
Post Office Saving Scheme | Any individual | 1(if single account) | 4%p.a. | No maturity period | Min. Rs.500 Max. No limit | Not allowed | Taxable after claiming exemption and deduction under section80TTA/80TTB | Interest rate can change from time to time after the account is opened |
National Savings (Monthly Income Account) Scheme | Any individual | No limit | 7.6%p.a. | 5years | Min. Rs.1000 Max. Rs.4.5 lakhs (single account) andRs.9lakhs (joint account) | Not allowed | Resident Indian senior citizens (those Aged 60or more) can claim section 80TTB deduction in respect of interest upto Rs. 50,000. Fully taxable for others. | Fixed Interest rate |
National Savings Time Deposit Scheme | Any individual | No limit | 6.9% p.a. & 7.7%p.a. | 1year/2 years/3 years/5years | Min.Rs.1,000 Max. No limit | Allowed for 5year Time deposit. Not allowed for 1year/2year/3year time deposit | Resident Indian senior citizens (those Aged 60ormore) can claim section 80TTB deduction in respect of interest upto Rs.50,000. Fully taxable for others. | Fixed Interest rate |
National Savings Recurring Deposit Scheme | Any individual | No limit | 7.2%p.a.(approx.) | 5years | Min. Rs.100 Max. No limit | Not Allowed | Resident Indian senior citizens (those Aged 60ormore) canclaim section 80TT B deduction in respect of interest upto Rs.50,000. Fully taxable for others. | Fixed Interest rate |