The government offers several savings schemes with attractive interest rates to encourage people to save and invest regularly. Designed for different age groups and financial needs, these schemes can help build wealth over time.
From public provident fund (PPF) to National Savings Certificate (NSC), each scheme has different features, eligibility criteria and interest rates. One of the most important aspects of these government-backed schemes is that they all provide assured returns. This makes them popular among risk-averse investors seeking stable and secure growth.
Here Are 4 Key Govt-Backed Schemes Investors Can Consider:
1. Public Provident Fund (PPF): This is a long-term savings scheme that is highly popular among investors due to tax benefits. Backed by the government, the scheme currently offers 7.1% returns per annum. Contributions made to PPF can be claimed to reduce tax liability under the old tax regime. Meanwhile, the interest earned and the overall maturity value of the corpus is entirely tax-free. Investors can invest as low as Rs 500 to up to Rs 1.5 lakh per financial year. A PPF account has a 15-year maturity period and can be extended further.
2. Senior Citizens' Savings Scheme (SCSS) is a government-backed savings scheme. It is designed for senior citizens. As per the rules, individuals aged 60 years and above and certain retirees aged 55 to 60 years can open their accounts.
Under this scheme, one can invest a minimum deposit of Rs 1,000, with a maximum limit of Rs 30 lakh. Accounts can be opened individually or jointly with a spouse. The scheme has a five-year tenure, extendable by three years. It also offers tax benefits under Section 80C. The scheme currently offers an interest rate of 8.20% p.a.
3. National Savings Certificate (NSC): This is a government-backed savings scheme that offers guaranteed returns and a five-year maturity period. Investors can start with a minimum deposit of Rs 1,000, with no maximum investment limit. The scheme currently offers an interest rate of 7.7% and also allows investors to avail loan facilities.
4. Sukanya Samriddhi Yojana: This is a government-backed savings scheme designed to secure the financial future of girl children. Parents or guardians can open an account for a girl child below 10 years of age with a minimum deposit of Rs 250 and a maximum annual deposit of Rs 1.5 lakh.
As per the rules, partial withdrawals are also allowed for higher education expenses. Additionally, premature closure is permitted in case of marriage after the account holder turns 18. The scheme matures after 21 years of opening the account and offers tax benefits under Section 80C. The interest earned in this scheme remains tax-free and currently stands at 8.2% p.a.
Also Read | Tax Notice After Filing ITR? These Five Salary-Related Mistakes Could Be The Reason
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.