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Top 10 Savings Schemes in India With The Highest Interest Rate

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Posted on
Oct 09, 2022

Saving money is an essential financial habit that everyone should develop. It helps you in times of need and enables you to reach your financial goals. While there are several ways to save money, investing in a savings plan is one of the most effective methods.

A savings plan or Saving Scheme is a life insurance policy that provides you with financial security in case of an unforeseen event while also helping you grow your wealth over time. The best part about investing in a savings plan is that it offers tax benefits under section 80C of the Income Tax Act.

Several types of saving schemes are available in the market, each with its own features and benefits. To help you choose the right savings plan for yourself, we have compiled a list of India’s top 10 Best Saving Schemes based on their return on investment (ROI).

Here is a list of the top 10 savings plans available in India:

Contents Hide

1 1. Public Provident Fund (PPF):

2 2. Employees’ Provident Fund (EPF)

3 3. National Savings Certificate (NSC)

4 4. Sukanya Samriddhi Yojana (SSY)

5 5. Senior Citizen Savings Scheme (SCSS)

6 6. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

7 7. Fixed Deposits (FDs)

8 8. Recurring Deposits (RDs)

9 Mutual Funds (MFs)

10 10. Equity-Linked Saving Scheme (ELSS)

11 How to choose the best saving scheme?

12 Conclusion

1. Public Provident Fund (PPF):

The Public Provident Fund is a long-term Govt Saving Schemes offered by the government of India. It has a lock-in period of 15 years and provides an interest rate of 7.6% per annum. Investments made in PPF are exempt from taxes.

2. Employees’ Provident Fund (EPF)

The Employees’ Provident Fund is a retirement savings scheme for employees in India. It has a lock-in period of 5 years and offers an interest rate of 8.5% per annum. EPF contributions are eligible for tax benefits under section 80C of the Income Tax Act.

3. National Savings Certificate (NSC)

The National Savings Certificate is Saving Schemes that is offered by the government of India. It has a lock-in period of 5 years and offers an interest rate of 8% per annum. NSC investments are eligible for tax benefits under section 80C of the Income Tax Act.

4. Sukanya Samriddhi Yojana (SSY)

The Sukanya Samriddhi Yojana is a long-term savings scheme for the girl child. It has a lock-in period of 21 years and offers an interest rate of 8.1% per annum. Investments made in SSY are eligible for tax benefits under section 80C of the Income Tax Act.

5. Senior Citizen Savings Scheme (SCSS)

The Senior Citizen Savings Scheme is a long-term saving scheme for senior citizens in India. It has a lock-in period of 5 years and offers an interest rate of 9% per annum. Investments made in SCSS are eligible for tax benefits under section 80C of the Income Tax Act.

6. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana is a long-term Saving Schemes In India for senior citizens. It has a lock-in period of 10 years and offers an interest rate of 8% per annum. Investments made in PMVVY are eligible for tax benefits under section 80C of the Income Tax Act.

7. Fixed Deposits (FDs)

Fixed Deposits are a type of savings account where you can earn interest on your deposits. They have a fixed term and offer higher interest rates than regular savings accounts. FDs typically have a lock-in period of 5 years, but some banks offer FDs with shorter terms. Interest earned on FDs is taxable.

8. Recurring Deposits (RDs)

Recurring Deposits are similar to Fixed Deposits, but they allow you to make smaller deposits every month. They have a fixed term and offer higher interest rates than regular savings accounts. RDs typically have a lock-in period of 5 years, but some banks offer RDs with shorter periods. Interest earned on RDs is taxable.

Mutual Funds (MFs)

Mutual Funds are investment products that pool money from investors and invest it in a variety of securities. MFs usually offer superior growth rates compared to your normal fixed deposits and savings. MFs offer different risk and return profiles, so choosing the right MF for your needs is important. However, investment in MFs is subject to market risks, so please consult your financial advisor before investing.

10. Equity-Linked Saving Scheme (ELSS)

ELSS are mutual funds that invest primarily in equity markets. They have a lock-in period of 3 years and offer great potential for high returns. However, ELSS also comes with the risks associated with equity investing, so please consult your financial advisor before investing.

How to choose the best saving scheme?

When it comes to choosing the Best Saving Plan plan for you, there are a few factors you need to take into consideration. First, you need to decide what your investment goals are. Are you looking to save for retirement? For a child’s education? Or for a rainy day? Once you know your goals, you can start looking at different investment options and compare them based on factors such as returns, risk, fees, and tax benefits.

Returns: When comparing investment plans, one of the most critical factors to look at is the potential return on investment. Each type of investment carries a different level of risk, which will affect the possible return you can earn. For example, equity-linked saving schemes (ELSS) offer the potential for high returns, but they also come with the risks associated with equity investing. So, make sure you set your priorities straight when it comes to returns. This means finding out the amount of return you are satisfied with, being clear about your short-term and long-term financial goals, etc.

Risk: Another important factor to consider when choosing an investment plan is your risk tolerance. Some people are willing to take on more risk to potentially earn higher returns, while others prefer to stick with safer investments that offer lower returns. It’s important to know your own risk tolerance before making any investment decisions.

Fees: Another thing you need to look at when comparing investment plans is the fees charged by the provider. Some investment plans have high fees, which can eat into your returns. So, compare the fees charged by different providers before making a decision.

Tax benefits: Some investment plans offer tax benefits, which can help you save money on your taxes. For example, certain tax-saving mutual funds (ELSS) investments are eligible for deductions under section 80C of the Income Tax Act. So, if you are looking for an investment that can help you save on taxes, consider this factor.

These are just some of the factors you need to consider when choosing the Best Money Saving Plans . It’s important to do your research and compare different options before making a decision. You should also consult a financial advisor for professional guidance on how to best save for your future.

Conclusion

There are a lot of different investment options available in India. It is important to research and choose the plan that best suits your needs. You should also consult a financial advisor to get professional guidance on how to best save for your future.

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