A Beginner’s Guide to Investment: Find the Best Saving Plan

We all want our finances to grow and our wealth to expand over the years. In today’s time and age, it is very important to have the best saving plan in your kitty to maintain your lifestyle and protect yourself against emergencies. The best way to achieve that objective is by investing your money in the right saving schemes to help you build a corpus of funds. 

In this article, we will talk about the most common investment instruments that make up the best saving plan. Read on to know more. 

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  1. National Savings Certificate

National Savings Certificate (NSC) is one of the best savings plans that one can open at a post office in India. This plan is backed by the Government of India that encourages people to invest while giving them tax-saving benefits. It is a low-risk, fixed return investment that anyone above the age of 18 years can buy. This plan is available with a fixed maturity of five and ten years. You can buy multiple plans but only save up to Rs. 1.5L per annum from this instrument u/s 80C of the income tax act. NSCs are ideal for investors who are looking for a high rate of interest from a low-risk investment. 

  1. Senior Citizen Savings Scheme

If you are wondering what is retirement planning and how you can save money for the years when you no longer have a job, then a senior citizen savings scheme is the answer. This plan offers you a regular income post-retirement and saves tax during your investment period. If you are one of those retirees who does not want to dabble in risky equity funds, you can consider investing in this one. It is easy to buy this savings plan from any certified bank or post office in India. The maximum amount you can invest in this plan is Rs. 15L. The average tenure of SCSS is 5 years but it can be extended for 3 more years. You can claim a tax deduction of up to Rs. 1.5L u/s 80c of the income tax. You can also make premature withdrawals when you invest in this scheme. 

  1. Recurring Deposits

A recurring deposit is a term deposit that one makes at a nationalized bank. Known to be one of the best saving plans, it is meant for people who are looking for a huge return on their investment at the time of maturity. You can choose the tenure and the amount to be paid monthly as per your convenience. However, you can start an RD account as low as Rs. 500. You can also choose the tenure from 7 days to 10 years, making it an ideal instrument for investors who want to save a fixed amount every month. It also helps develop a healthy habit among people to save money regularly. 

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  1. Post Office Monthly Income Scheme (MIS)

In this savings scheme, you can invest a certain amount and receive interest payments monthly. It is a low-risk instrument that generates a steady income. The money you invest is 100% safe as the scheme is backed by the government. When you reach the maturity period, you can either reinvest the amount or withdraw it. However, it is important to note that your monthly payments are subject to tax, and you cannot invest more than Rs. 4.5L. 

  1. Public Provident Fund (PPF)

PPF is a government-backed savings plan and is considered to be the safest investment option in India. The contribution that you make towards your PPF account is eligible for tax deduction u/s 80c. You can earn an interest rate of 7.6% and grow your wealth throughout the investment period by the power of compounding. You can open a PPF account as low as Rs. 500 and invest a maximum of Rs. 1.5L. 

  1. Sukanya Samriddhi Yojana (SSY)

This savings scheme is specifically designed by the Ministry of Finance to secure a girl child and her future. Some of its benefits include:

  • The highest annual rate of interest of 8.1% 
  • You can easily open an SSY account at any authorized bank or post office.
  • You can start an SSY account with as low as Rs. 1,000 and invest a maximum of Rs. 1.5L per annum. 
  1. Atal Pension Yojana

This is one of the best saving plans for people who belong to the weaker section of society. It is applicable to those who work in low-income, unorganized sectors and requires financial support from government-sponsored schemes. It offers a robust post-retirement saving scheme to people who can enjoy a steady income by investing a very small amount. 

These are some of the many options that you can add to your investment portfolio to build a savings plan that will secure your present as well as future. 

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