“Exploring the Best Government-Backed Savings Schemes: Features and Benefits”

“Exploring the Best Government-Backed Savings Schemes: Features and Benefits”

Highest interest is available in these government schemes, many benefits with guaranteed returns, see here

Government Savings Schemes: Everyone saves money for financial security and energy to meet emergencies. Interested in investing in stable and safe financial instruments. That is why government-backed savings schemes are so popular. Many of these schemes are available from various financial institutions. They provide features like tenure, eligibility criteria, deposit limits, interest rates. Almost all categories have something in the market that caters to their needs. While some focus on senior citizens, others offer financial benefits to women or farmers. There are some special schemes for salaried employees. These can be obtained from banks or post offices across the country. Let’s see the best government schemes currently available and their features.

People can open a post office saving account with a minimum deposit of Rs.500. There is no maximum limit on deposits. This account can be opened individually or jointly with another adult. Minors who have completed 10 years of age can also open an account individually. An income tax deduction of up to Rs.10,000 can be availed for the interest earned under this scheme. Interest can now be up to 4 percent in this scheme.

Individuals can deposit a minimum of Rs.100 per month in the Recurring Deposit Account Scheme. There is no maximum limit. Depositors can make advance deposits for 6 or 12 months and get concession on this. Account matures in 5 years. After one year of account opening, you can withdraw up to 50% of the existing balance. Post office after three yearsSavings The account can be closed before maturity by earning regular interest at the rate of POSA. Currently 5 years recurring deposit fetches interest rate of 6.5%.

Individuals can invest a minimum of Rs.1,000 in the Kisan Vikas Patra (KVP) scheme. After that the amount should be in multiples of Rs.100. There is no maximum limit for the amount to be deposited. Account can be opened by adults or can be opened for minors as well. A minor can open even after attaining the age of 10 years.

Joint ‘A’, Joint ‘B’ type accounts can be opened by three adults with different payment options. KVP accounts can be opened at post offices or authorized banks. These can be transferred between individuals and post offices. KVP can be encashed after two and a half years from the date of investment. KVP is offered at 7.5% interest for a maturity period of 115 months.

Mahila Samman Saving Certificate Scheme has been launched by the Government of India. In this small savings scheme up to Rs.2 lakh can be deposited in the name of women or girls for 2 years. Partial withdrawals are possible, offering a fixed interest rate of 7.5%.

Sukanya Samriddhi Account is specially designed for the welfare of girl child. A minimum of Rs.250 and a maximum of Rs.1.5 lakh can be deposited in a financial year.

This account can be opened in the name of girl child till the age of 10 years. Up from the accounteducation Money can be withdrawn for expenses, the account can be closed prematurely for marriage purposes after the girl turns 18. Account can be transferred to post offices and banks across the country. Sukanya Samriddhi account matures 21 years from the date of opening. This scheme is currently offering 8% interest.

A minimum of Rs.500 and a maximum of Rs.1.5 lakh can be deposited in the Public Provident Fund (PPF) scheme for a financial year. This long term deposit scheme offers loans from the third year to the sixth year. There is a possibility to withdraw from the seventh year. PPF account matures after completion of 15 financial years from the year of account opening.

Extendable in blocks of 5 years with additional deposits. After maturity the account can be maintained without further deposits. You can get the prevailing interest rate. All money in PPF account is not subject to attachment as per any court order. Deduction can be claimed under Section 80-C of the Income Tax Act on deposits in PPF account. Interest earned is also tax free. The PPF scheme currently pays 7.1% interest.

A minimum of Rs.1000 can be invested in National Savings Certificate (VIII Issue), then in multiples of Rs.100. It is a fixed income deposit scheme. There is no maximum limit on deposits. Matures after 5 years. The scheme offers single holder accounts, joint ‘A’ and joint ‘B’ type accounts for adults and minors. Loans can be obtained by pledging certificates in banks. The interest rate of this scheme is 7.7%.

Senior Citizens Savings Scheme (SCSS) is eligible for persons aged 60 years or above. However, retired persons between 55 and 60 years of age are also eligible under certain circumstances. The minimum deposit in this scheme is Rs.1000 and the maximum limit is Rs.30 lakhs.

SCSS accounts can be opened individually or jointly with a spouse. Interest is paid quarterly. Account can be closed after 5 years. Can be extended for additional 3 years. Premature closing is possible under certain conditions. Deductions under Section 80-C of the Income Tax Act can be claimed on deposits in SCSS. The current rate of interest in SCSS is 8.20%.

National Savings Time Deposit Account offers different options with tenures of 1 year, 2 years, 3 years and 5 years. In this scheme, the minimum deposit is Rs.1000, then you can invest in multiples of Rs.100. There is no maximum limit. Account can be closed prematurely after six months. Deduction under Section 80-C of the Income Tax Act is available on deposits in a 5-year time deposit account. The interest rates in this scheme vary from 6.90% to 7.5% depending on the tenure.

A minimum of Rs.1000 and a maximum of Rs.9 lakhs can be deposited in the National Savings (Monthly Income Account) scheme. These amounts should be in multiples of Rs.100. Up to Rs.15 lakh can be deposited in the joint account. Account matures after 5 years. Depositors can manage multiple accounts under this scheme. The amount that can be invested is subject to a maximum limit. Pre maturity closing after one year but within three years with 2% discount on deposit. A discount of 1% is applicable after three years. This scheme now fetches 7.4% interest.