Top 10 Government Schemes to Invest in India in 2021
By: Ravikumar Nama
Tags: Personal Finance, Financial Planning, India, Saving, Investment

(Published on 24-Nov-2020)

To encourage the habit of savings or investment, the Government of India has started multiple schemes for its citizens to invest. Most people either keep the money in cash or keep that in savings or Fixed Deposit Account. Savings account typically gives a return of around 3%-5% whereas Fixed Deposit can give a slightly higher return of around 6%. However, there are other factors such as Tax, Age etc. that should also be kept in mind while making these decisions. We have listed Top 10 Government Schemes for you to invest.

Top 10 Government Schemes to Invest in India in 2021

1. Sukanya Samridhi Yojana — Savings for Girl Child

As part of India’s Government initiative Beti Bachao Beti Padhao campaign, the Sukanya Samriddhi Yojana (SSY), a small savings scheme, was launched in 2015. SSY is a scheme that revolves around the intention of the welfare of women and girl child in India. With the least amount of contribution of just Rs. 250, the scheme’s applicants can avail higher returns of 7.6% along with tax benefits of maximum Rs. 1.5 lakh under section 80C of the Income Tax Act (1961). Sukanya Samriddhi Yojana calculator can assist in determining the returns you receive as per the invested amount and tenure

2. Public Provident Fund — Retirement Savings Scheme

PPF or “Public Provident Fund” is a retirement savings tax-free scheme, which is offered by the Government of India. The minimum deposit amount is Rs. 500 per annum and the maximum limit is Rs 1,50,000 per annum. A PPF account matures after the completion of 15 years from the end of the year in which the account was opened. At maturity, you can extend the PPF account indefinitely in blocks of 5 years at a time. The interest on the account is set every quarter and is paid by the Government of India. The applicable PPF interest rate for this quarter is fixed at 7.1%. The interest and maturity proceeds are exempted from tax, under Section 80C of Income Tax Act. The PPF accounts can be opened at any post office or in any authorized Bank. You can find out the maturity amount using PPF Calculator

3. Employee Provident Fund — Retirement Savings Scheme

Employees Provident Fund is another tax-free retirement benefit program primarily for all the salaried persons, especially belonging to the private/unorganized sector PF. It is a kind of savings scheme, where the employee contributes a specified proportion of his salary and an equal contribution is made by his employer, to form a retirement fund for the employee. On retirement, the employee receives a lump sum amount, including self and employer’s contribution, along with interest on both. Current PF interest rate is 8.5% at the moment. PF Calculator can help you determine total PF at retirement at the current interest rate.

4. National Savings Certificate (VIII Issue)

National Savings Certificate is an excellent investment for adults as it’s safe (guaranteed by Government of India), pays guaranteed interest income (at maturity) and provides tax exemption under 80C. You need a minimum of Rs 100 to open an account and there is no upper limit to the investment. Currently, the rate of interest is 6.8%, which the government revises every quarter. NSC Calculator computes the interest gained and final maturity amount on your investment. This scheme is available through most of the post-offices of India.

5. Post Office Recurring Deposit (RD)

India Post Recurring Deposit or RD Account provides allows individuals to open a 5-year post office recurring deposit account. The interest rates get revised periodically, and currently, you can earn an interest of 5.8% p.a. which can be checked via Post Office RD Calculator. The interest gets compounded every quarter and this ensures the sum of money multiplies when it reaches the maturity time.

6. Post Office Time Deposit or Fixed Deposit

Post Office Time Deposit, commonly known as Post Office Fixed Deposit, is a fixed deposit scheme that is similar to bank Fixed Deposit. You can invest a certain amount for a fixed period at a fixed rate of interest. The return from POFD is guaranteed and backed by the government of India and allows investments for a varied amount of times such as 1 year, 2 years, 3 years, and 5 years. Post Office Time Deposit calculator calculates of future savings based upon your deposit amount, post office’s interest rate and time horizon of investment

7. Post Office Monthly Income Scheme (MIS)

Post Office Monthly Income Scheme (Post Office MIS) is one of the highest-earning schemes having an interest rate of 6.6% p.a., and maturity of 5 years. One can invest a maximum of Rs 4.5 lakh in a single account and Rs 9 lakh in a joint account. Check total interest earned using Post Office MIS Calculator

8. Post Office Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a savings tool for those above 60 years of age which provides senior citizens with a secure and a steady source of income after retirement. SCSS offers an attractive interest rate of 7.4% and is available at various Public / Private sector banks and in Post Offices. This scheme has a maturity period for 5 years which can be extended once by an additional 3 years as per Senior Citizen Savings Scheme Calculator

9. Kisna Vikas Patra — Fixed Income Investment

Kisan Vikas Patra (KVP) is a money double scheme of government of India where your principal grows at a rate of 6.9% per annum and gets doubled in 124 months. This scheme is available through most of the post-offices of India. You can use the KVP Calculator to compute the final amount that you can get at maturity.

10. National Pension Scheme (NPS)

National Pension Scheme is a pension scheme to encourage adults to plan for their retirement. The scheme allows you to contribute regularly in NPS account during your working life. Post-retirement, you can withdraw a part of the corpus in a lumpsum amount and remaining in instalments to secure a regular income after retirement. This scheme not only provide good returns but also attractive tax benefits. This scheme has additional tax benefits of Rs 50,000 over and above Rs 1,50,000 under section 80C and 80CCD

Disclaimer

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.