Saving Schemes in India

Updated On Apr 27, 2021

Types of Saving Schemes Available in India
Take Away

Investing in savings plans assists one in meeting huge financial requirements like financing children's education and marriage in a stress-free manner. Investing in such schemes also provides additional income, apart from inculcating a disciplined habit of saving money. There are different small savings plans with which you can start your investment journey with a small amount and earn a significant cumulative amount over the long term.

Types of Saving Schemes Available in India

Given below are some of the top saving schemes available in India.

1. Public Provident Fund

It is possible to open the scheme at post offices and banks and the tenure of the scheme is 15 years. It is appropriate for people to extend the length of the scheme by another 5 years. Individuals have to make a minimum contribution of INR 500 and a maximum contribution of INR 1.5 lakhs on an annual basis

2. National Pension Scheme (NPS)

The NPS was initiated by the central government with the primary goal of ensuring a monthly income for people after their retirement. Employees can get a lump sum when they retire, as well as a certain percentage would be paid as a pension.

3. Atal Pension Yojna

The primary goal of the scheme is to support those who are below the poverty threshold. The scheme, therefore, supports persons who work in the unorganized sector and who need government financial assistance. Individuals pay a low premium to earn a pension after retiring.

4. Post-Office Savings Scheme

Under this savings scheme, the risks are very minimal and most of the schemes have assured returns. The process of opening accounts for any saving schemes in the post office is easy and quick.

5. Kisan Vikas Patra (KVP)

Post offices in India offer the KVP scheme. The interest rate offered is 7.7 percent and it is compounded annually. The minimum contribution must be INR1000, however, there is no upper limit. The money invested in this scheme doubles over 112 months.

6. Senior Citizens Savings Scheme (SCSS)

The SCSS was introduced to support people above 60 years of age. The advantages of the SCSS can be availed by people between the ages of 55-60 years who have selected the Voluntary Retirement Scheme (VRS). A minimum of INR 1000 should be invested and the maximum investment is INR 15 lakhs. Tax exemptions are eligible under Section 80C of the Income Tax Act.

7. Voluntary Provident Fund

VPF is the contribution by employees above the minimum contribution in Employees Provident Fund. In the VPF scheme, unlike the EPF scheme, where only 12% of the basic salary could be contributed, employees are permitted to contribute their whole basic salary to the scheme.

8. National Savings Certificate

As the scheme is supported by the Government of India, assured returns and tax advantages are offered. The scheme's tenure is 5 years and people could invest in this scheme at post offices. The scheme's interest rates (around 8% compounded annually) are determined by the Government of India quarterly.

Take Away

Saving schemes are initiated by the Indian Government or financial institutions/banks in the public sector. Their investment horizons, tax treatment, and interest rates vary. The benefit of saving schemes is that they are backed by the Indian government, thus ensuring your invested money is safe and secure. Besides, they are low-risk and have good returns.