Equity stocks and Mutual funds helps investors financially by increasing their money at a faster rate. Although this comes with huge risks and also the returns it provides are not always guaranteed in these markets.
The stock and mutual fund is considerably more beneficial for investors with higher seekers and higher disposable income.
But what about the average investors who earns low monthly income. These people need a guarantee of safety of their deposits to prepare for Fundamental Future necessity it can be for children’s education, health emergencies, home repair and daughter’s marriage etc.
After getting the essential requirements, they may also think for high- reward and high- risk options.
Now let’s check the most popular 5 Government National Saving Schemes which comes with a sovereign guarantee and also healthy average rates-
1. National Savings Certificate (NSC)
The scheme provides 6.8 % interest rate which is compounded annually, it guarantees returns and several benefits, includes tax reduction under section 80C of the Income Tax Act. National Savings certificates can be purchased for Five years. Let us see an example, suppose you purchase a NSC for 1000 for this month, after 5 years it will increase to Rs 1389.49. If you think smartly, you can also use NSC for regular monthly income.
2. Public Provident Fund (PPF)
The Scheme doesn’t include tax on deposits up to Rs 1.5 lakh under section 80C, even the interest and maturity amount are also free from tax. The PPF scheme offers 7.1% interest rate to investors and it always provides high interest rates than bank Fixed deposits.
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3. Senior Citizen Saving Scheme (SCSS)
The scheme helps senior citizen who don’t receive any monthly cash flow from any source. But, with the help of this scheme the senior citizens receive quarterly interest after the deposit up to Rs 15 lakh in an SCSS account. The deposited amount is also returned to the account holder after completing the maturity period.
4. Sukanya Smriddhi Yojana (SSY)
The scheme helps the parents to save a good amount for their daughter. It gives 7.6% healthy interest rate of 7.6% per year (calculated yearly or compounded annually). Interest rates on SSY is also exempted from tax.
5. Kisan Vikas Patra (KVP)
The scheme ensures guaranteed returns. With the help of this scheme the deposited amount gets double in 124 months. KVP gives interest rate of 6.9%. However, the tax benefits are not same as PPF or NSC.
