Everyone wants to grow their wealth to look after their own well-being and fulfil all the financial needs of their family. At this time, it is crucial to save funds for emergencies or to secure the retirement financially. Investing in saving schemes is the smart way to increase your wealth and cater to day-to-day financial requirements.
The saving schemes in India offer various features that help to meet specific financial needs of an individual by ensuring that the investment is as per one’s risk appetite and suitability. There is also the advantage of insurance coverage.
Why Should You Invest in Saving Schemes?
The saving schemes are introduced by the government of India or the public sector banks or financial institutions. The significant advantage of the saving schemes is that they are backed by the Indian government. Therefore, they are entirely safe and secure for the investors. The saving schemes in India are low-risk instruments, and at the same time, they offer a good return.
Before investing, you should learn about the various saving schemes available in India, like what Is RD, FD, and other plans.
Benefits of Investing in Saving Schemes
There are many advantages of the best saving plans. Here’re the most important ones.
- The premiums under the savings scheme are affordable and can be paid annually, quarterly, and monthly as per the convenience of the policyholder.
- The maturity benefits of the saving schemes offer certain fixed savings to the policyholders so that they can achieve the desired financial corpus.
- The saving schemes offer life coverage and financial security to the family even after the untimely demise of the policyholder.
- The returns under the saving schemes are risk-free and guaranteed. The policyholder will receive the promised amount at the maturity period.
- The policyholder will also receive tax benefits under Section 80C of the Income Tax Act, 1961.
Best Saving Schemes in India
There are several saving schemes available in the Indian market. You should choose one depending upon the requirement and financial conditions. Here’re the best saving plans available in India.
ULIP – Unit Linked Insurance Plans
ULIP is a type of life insurance product that combines safety and wealth creation opportunities. A part of the investment goes towards providing life cover, and one portion is invested in a fund that invests in stocks and bonds. Unit Linked Insurance Plans are the easiest and the best saving plans in India for an investor to enter the stock market with the added advantage of life cover.
PPF – Public Provident Fund
PPF is a long-term saving scheme which was introduced by the National Savings Organization. The term period in PPF is 15 years, so the maturity amount is provided to the investor after 15 years. It is one of the safest saving schemes in India, and the interest rate of PPF is 7.9%. The interest rate in PPF is tax exempted, and the tax contribution made towards the PPF account up to the maximum limit of INR 150,000 is tax exempted under Section 80C of the Income Tax Act, 1961.
NSC – National Savings Certificate
The National Savings Certificate is a government backed savings scheme. It is a fixed income investment plan that can be opened with any post office. The NSC is best suited for mid-income investors who have a low-risk appetite. The investment made towards the NSC up to the maximum limit of INR 150,000 is eligible for tax exemption under Section 80C of the Income Tax Act 1961.
SCSS – Senior Citizen Savings Scheme
This scheme has been specially introduced to fulfil the needs of the senior citizens of India. It can be availed by an individual at least 60 years of age. Individuals whose age ranges from 55 to 60 years and those who have opted for voluntary retirement schemes can also invest in Senior Citizen Savings Scheme.
NPS – National Pension Scheme
National Pension Scheme is a saving scheme that provides a secure source of monthly income after retirement. In order to get the NPS benefits, an individual has to make a small contribution as a premium payment towards the scheme while being employed. The lump sum fund accumulated throughout the entire tenure of the scheme is paid to the policyholder every month post-retirement.
A regular savings scheme can help individuals be financially prepared for any type of eventualities. Also, it enables a person to meet their long-term and short-term financial objectives of life. It is suggested that you invest after considering your risk appetite, time horizon and your financial goals. It helps you to live your golden days of retirement in a stress-free way.