Different saving schemes have been launched by the Indian government and the public sector undertakings or banks. Each of these varies in tax treatments, interest rates, investment patterns, and others. A saving scheme prepares one to go through any unforeseen expenditure, including medical emergencies. It helps meet personal aspirations, educational requirements, marriage, or the need for higher education for your children. Besides, the income from any savings scheme is like an additional income source.
There are benefits of the scheme, and the major one is that they are government based. It assures security and safety when you opt for the scheme from a government entity. It assures good returns over a stipulated time. The interest rates often get revised, and look for the best rates before investing money in any savings scheme.
Why Opt for Saving Scheme in India?
Any money saving plan is like an investment choice for the ones who value savings and are into future-centered plans. Some benefits to enjoy from the various saving schemes are:
• Encourage financial discipline
While one is aware of financial savings and its importance, doing it judiciously is another that one shouldn’t miss out. This is how the savings plan can be effective and useful as you start to get potential returns from it. It includes suitable financial discipline for your life and managing your finances better.
• Gives good coverage
If aiming for a life insurance program, the saving plans will be beneficial and offer suitable financial coverage for your family members in case of untimely demise. Apart from the payout under the scheme, there will be added coverage to offer financial help to your family.
• Offer flexibility
Every individual is unique and their financial priorities and goals. One should take savings consideration into account when opting for any saving plan. It is better to for a scheme that offers a plethora of benefits to investing in. The option of funding and investment criteria should be feasible for an individual to go for the savings plan than the rest. You can switch between the investment choices as and when the need for capital and the involved risks changes.
• Helps save tax
Saving plans are beneficial life insurance plans, it offers significant tax benefits. You can get an exemption of rupees 1.5 lakh for any premium payment according to Income Tax Act.
• Help meet goals
Some saving plans can help meet specific goals of families and individuals if you opt for the savings plan on time. Saving plans are like investment plans that encourage one to save and meet specific life goals, such as paying for children’s education needs.
• Choose Right Saving Plan
When choosing a saving plan, there are a variety of options with variable interest rates to pick from. To determine the plan that works the best for your economic goals, you have to go by either short-term or long-term goals so that you can benefit adequately from the savings plan. You should pay attention to the flexibility and the unique feature of each saving scheme before opting for it.
It is easy to main and continues to invest in the savings scheme. These are simple investment ways that give the provision to invest online timely. Being government saving plans, these are secured and safe with assured benefits upon maturation of a specific time.
Some Popular Types of Schemes
PPF and EPF
Public Provident Fund is the popular and safest plan in which interest is tax exempted. Open the scheme at the bank and post office for a duration of 15 years. It’s calculated as compound interest, which is 8% and requires a minimum contribution of rupees 500.
The Employees’ Provident fund help saves for retirement. It is where both employer and employee will contribute 12% each and given at 8.65% interest.
The national pension scheme is by the Indian government to offer regular income after retirement. It will be given monthly.
National Savings Certificate is a popular option that guarantees returns and tax benefits. It has 5 years and can be invested in post offices. The interest rate of 8% is on a quarterly basis.
Post Office Savings Scheme
The scheme risks are minimal, with suitable returns. The procedure to open a savings account is simple and offers features for investors.
Savings schemes from India Post Office are:
• Sukanya Samriddhi account
• Senior citizen savings scheme
• Post office savings account
• Public provident fund account
• National savings monthly income account
• Kisan Vikas Patra account
• National savings Certificate account
• National Savings Recurring Deposit Account