Top 10 Saving Schemes in India in 2024: Compare Interest Rates, Benefits

Top 10 Indian Saving Schemes: Compare Interest Rates, Benefits | 2024 Insights

A saving scheme is a financial product or program designed to help Indian citizens save and invest their money to earn higher interest rates in return. It is a very systematic and structured manner of investment. They are offered by banks, financial institutions, and government agencies. The government provides various investment options to the Indians to avail themselves of tax deductions and exemptions under the Income Tax Act, of 1961. In India, various saving schemes are available to cater to the diverse needs and preferences of individuals. Today, we bring you a list of various types of saving schemes with their interest rate, comparisons and benefits. These schemes are offered by both the government and private financial institutions and provide opportunities for individuals to save and invest their money in a structured manner

 

Also Read:-

Home Loan Interest Rates in India 2024: Top Banks, Rates, Eligibility Criteria & More!

 

 

Various Types Of Saving Schemes:-

1. Tax-saving Fixed Deposits (FDs)

Tax-saving Fixed Deposits (FDs)

It is a special investment offered by private or public banks in India that provide tax benefits under Section 80C of the Income Tax Act, 1961. It allows investors to invest a certain amount of money for a fixed tenure with the maximum investment eligible for tax deduction under Section 80C being Rs. 1.5 lakh per financial year. Tax-saving FDs typically have a lock-in period of 5 years. Premature withdrawal or partial withdrawal is generally not allowed in the Tax-saving Fixed Deposits (FDs).

  • Interest rate: 5.75% to 8.60% PA
  • Tenure: 5 years
  • Minimum Investment: Rs 100
  • Maximum Investment: No Limit

 

2. Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plan (ULIP) is a special investment that combines the benefits of insurance coverage with investment opportunities. It is a single scheme which gives benefits of two. Under ULIP, the premium paid by the investor goes to the life insurance and the rest goes to the equity, debt, or balanced funds. It is a flexible investment choice for Indians. ULIPs offer tax benefits under the Income Tax Act, of 1961. The premium paid for life insurance is eligible for tax deductions under Section 80C, subject to a maximum limit. It also comes with a lock-in period of 5 years.

  • Interest rate: Varies, not fixed.
  • Tenure: 5 – 20 years
  • Minimum Investment: Rs 2500
  • Maximum Investment: No Limit

 

3. Equity Linked Savings Scheme (ELSS)

Equity Linked Savings Scheme (ELSS)

 ELSS is a type of mutual fund that offers tax benefits under Section 80C of the Income Tax Act. It provides short lock-in tenure compared to other saving schemes. It provides opportunities for long-term wealth creation through investment in equities. Equity Linked Savings Scheme funds invest in the stock market and can give higher returns to investors as compared to traditional tax-saving schemes. It has tax deductions of up to Rs. 1.5 lakh, and the option to invest through Systematic Investment Plans (SIPs). It is flexible and risk-free.

  • Interest rate: Varies, not fixed.
  • Tenure: 3 years
  • Minimum Investment: Rs 100
  • Maximum Investment: None

 

4. Public Provident Fund (PPF)

Public Provident Fund (PPF)

Public Provident Fund (PPF) is one of the most popular and safest investment schemes in India. It is a long-term investment offered by the Government of India with a safe and tax-efficient way to save for their retirement. PPF accounts can be opened in designated banks and post offices across India. Moreover, they provide higher interest rates set by the government and are typically higher than those offered by traditional savings accounts. The rate of interest changes varies every year, It is eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakh per financial year.

  • Interest rate: Varies, current 7.1%
  • Tenure: 15 years
  • Minimum Investment: Rs 500 per year
  • Maximum Investment: Rs 1.5 lakh per year

 

5. Employees’ Provident Fund (EPF)

Employees' Provident Fund (EPF)

The Employees’ Provident Fund (EPF) is launched by the Employees’ Provident Fund Organisation (EPFO) to help employees save money for their retirement. It is a kind of social security scheme established by the Government of India. It provides financial security and stability to employees during their retirement years. Under this scheme, both the employee and employer make a monthly contribution of funds. For employees, the contribution is 12% of the basic salary plus dearness allowance. The funds in the Employees’ Provident Fund are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit. It is tax-exempt, and withdrawals after 5 years.

  • Interest rate: Varies, current 8.25%
  • Tenure: No Limit
  • Minimum Investment: 12% of basic salary
  • Maximum Investment: None

 

6. National Pension System (NPS)

The National Pension System (NPS) is a long-term retirement savings scheme by the Government of India. It provides a regular income during the retirement years. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). This scheme is open to all employees from the public, private, and unorganized sectors, as well as self-employed individuals. The National Pension System is focused on low cost and transparency. In addition, it is eligible for tax deductions under Section 80C of the Income Tax Act, subject to certain limits, and partial withdrawals are allowed for specific purposes. The rate of interest in NPS is not fixed.

  • Interest rate: Based on returns of pension funds 
  • Tenure: Till 60 years
  • Minimum Investment: Rs 1000 per year
  • Maximum Investment: None

 

7. Sukanya Samriddhi Yojana Account (SSY)

Sukanya Samriddhi Yojana Account (SSY) is a government-based savings scheme to promote the welfare and financial security of the girl child in India. It is introduced by the Prime Minister of India under the Beti Bachao Beti Padhao initiative. It is long-term savings for the education and marriage expenses of the girl child. Under the SSY scheme, parents can open an account with a girl’s name below the age of 10 years in the bank or post office. The scheme provides an interest rate, which is set by the government and compounded annually. Moreover, it is eligible for tax deductions under Section 80C of the Income Tax Act, providing additional savings benefits.

  • Interest rate: 8.2%
  • Tenure: Till 21 years
  • Minimum Investment: Rs 1000 per year
  • Maximum Investment: RS 1.5 lakh per year

 

8. Atal Pension Yojana (APY)

Atal Pension Yojana (APY) is also a government-based pension scheme. It is introduced to provide a sustainable pension income to unorganized sector workers during their old age. The government launched this scheme administered by the Pension Fund Regulatory and Development Authority (PFRDA). Indian citizens between 18 to 40 years old can open the Atal Pension Yojana account in banks and post offices. It is a special scheme launched for the below-poverty line(BPL) people. Hence, it is very affordable. Citizens can start with low investment as low as Rs. 42 per month for a pension of Rs. 1,000 per month. In addition, this scheme is eligible for tax benefits under Section 80CCD of the Income Tax Act. Once investors reach the age of 60, they become eligible to receive a guaranteed pension income for life, which they can use to fulfill their financial needs during retirement. The APY pension plan varies in pension amounts ranging from Rs. 1,000 to Rs. 5,000 per month, depending on the contribution levels.

 

 

9. Senior Citizens Savings Scheme (SCSS)

Senior Citizens Savings Scheme (SCSS) is a government-based savings scheme for senior citizens in India. This scheme was launched to provide help to senior citizens who are 60 years and above. The Senior Citizens Savings Scheme is Administered by the government through authorized banks and post offices. It provides a secure avenue for retirees to invest their savings and earn regular income during their retirement years. SCSS has a fixed maturity period of 5 years. The rate of interest is set by the government and is subject to periodic revisions. Hence, it is not fixed throughout life. Senior Citizens Savings Scheme is eligible for tax deduction under Section 80C of the Income Tax Act.

  • Interest rate: 8.2%
  • Tenure: 5 years
  • Minimum Investment: Rs 1000
  • Maximum Investment: Rs 15 

 

10. Post Office Savings Scheme

Post Office Savings Schemes refer to various investment options offered by the Indian Postal Service. There are various schemes available at the India Post. They are the most popular kind of saving because it has minimal risk and guaranteed returns. They have a fixed interest rate of 4.00% for the Post Office Savings Scheme as per the last update of 1 January 2023. Moreover, it is a very simple and quick scheme. Investor has to open a savings account in the Post office and start saving some amount.

  • Interest rate: 4%
  • Tenure: None
  • Minimum Investment: Rs 50
  • Maximum Investment: None 

 

Leave a Comment

Index
Floating Icons