Saving is one of the first financial habits we are taught from the beginning of our lives. The majority of goal we strive for in our lives is infused with the concept of putting aside a little today in order to enjoy a lot tomorrow. And going forth with the best saving plans is one of the best ways to do so. Saving schemes are essentially a type of life insurance plan that allows people to save, invest, and accumulate funds in order to meet their future needs.
A best savings plan, which is essentially a life insurance plan as mentioned earlier, provides the same tax advantages as other insurance plans. Under Section 80C of the Income Tax Act, the best saving plan can also allow you an exemption up to ₹1.5 lakh from your premium payments.
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What Are the Best Saving Plans in India That One Should Be Aware Of In Order To Save Money Effectively?
The following is a list of the best savings plans you should be aware of:
1. Atal Pension Yojana (APY)
APY is a government of India initiative aimed at bringing the unorganized sector into the social security system. This best saving plan, which was launched in 2015, is a voluntary pension scheme for workers in the unorganized sector. Subscribers to the APY scheme receive fixed monthly pensions of ₹1,000, ₹2,000, ₹3,000, ₹4,000, and ₹5,000 based on their contributions when they have reached the age of 60.
2. Sukanya Samriddhi Yojana (SSY)
The Indian Ministry of Finance has introduced the Sukanya Samriddhi Yojana. This is one of the best savings plans aimed specifically at securing the financial future of female children.
3. National Pension System (NPS)
The Pension Fund Regulatory and Development Authority (PFRDA) manages the National Pension System (NPS), which is a long-term retirement-focused investment product and in all sense fulfills the investment definition.
The annual contribution required to keep an NPS Tier-1 account active has been reduced from ₹6,000 to ₹1,000. It includes, among other things, equity, fixed deposits, corporate bonds, liquid funds, and government funds. You can decide how much of your money to invest in equities through NPS based on your risk appetite.
4. Voluntary Provident Fund (VPF)
Over and above the 12 percent contribution to the Employee Provident Fund (EPF), salaried individuals can opt for an additional contribution of up to 100 percent of their basic salary and dearness allowance under such savings schemes. On the accumulated funds, an interest rate of up to 8.5 percent can be earned.
Note: You should be aware that if you choose VPF, your employer will not contribute anything to the plan.
5. Kisan Vikas Patra (KVP)
This is also a government-backed, risk-free one of the best savings plans. Though it was originally intended only for farmers, it is now available to people from all walks of life and is seen as a lucrative investment and one of the best savings schemes.
You can join this savings plan if you are an adult Indian citizen. This is one of India’s best saving plans because it promises to double your money in 124 months, or 10 years and 4 months.
As a result, this strategy is appropriate if your goal is long-term and you want to keep your excess funds safe.
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6. National Savings Certificate (NSC)
The National Savings Certificate is a government of India initiative designed to assist investors in making regular long-term savings and participating in savings schemes. This is one of the many best savings plans available at all post offices, making it convenient for many people. NSC encourages low- and middle-income investors to save money on taxes while investing for the long term. While the interest rate is up to 6.8% per year, it is comparable to that of a PPF, which has rates set by the Indian government every year. Income tax benefits are available for investments up to ₹1,50,000 under section 80C of the Income Tax Act.
7. Post Office Monthly Income Scheme
The Post Office Monthly Income Scheme works in a similar way to a traditional savings scheme account. Individual account holders can invest in the saving scheme for a minimum of ₹1,500 and a maximum of ₹4.5 lakh. The account holder will receive a monthly fixed income in the form of interest credited to his or her savings account at the same post office. The rate of interest is up to 6.6 percent per annum.
This one of the best saving plans is only open to Indian citizens who live in India. And in the case of joint account holders, two or three people can invest up to ₹9 lakh in the saving scheme together.
Saving schemes, as a life insurance product, offer a variety of life insurance benefits, including death benefits, tax benefits, terminal illness benefits, and more. Choosing the best one for you can be extremely beneficial in the future. So go through all above mentioned best saving plans find the one fit for you.