While the fate of Ranbir Kapoor-Alia Bhatt starrer Brahmastra movie will depend on the interest and mood of cinema-goers, you will never like to depend on any variable factor if saving money for basic needs. In real life, you need a Brahmastra (an unfailing weapon) that would never let you down financially even in the worst of times. So what are the options?
Equity stocks and mutual funds are popular for helping investors grow their wealth at a faster rate. But they also come with huge market risks. Returns are never guaranteed in these market-based asset classes.
Due to associated risks, stocks and MF may be more suitable for investors with higher risk appetites and higher disposable income. But for the average citizens with less monthly income, every paisa matters. They need a guarantee of safety of their deposits to plan for basic future requirements like children’s education, daughter’s wedding, home repair, health emergencies etc. After securing money for basic needs, they may also look for high-reward, high-risk options.
Here’s a look at 5 Government National Savings schemes that not only guarantee the safety of deposits but also provide healthy average returns. The savings schemes work like a ‘Brahmastra’ that will never let you down even when the entire markets crash. These national savings schemes are the products of the Ministry of Finance, Government of India. They come with a sovereign guarantee. Therefore, they are fully secured and safe.
1. Public Provident Fund (PPF)
PPF comes with ‘EEE” benefits. There is no tax on PPF deposits up to Rs 1.5 lakh under Section 80C; interest earned and maturity amount are also exempted from tax. Currently, the PPF scheme is offering an interest rate of 7.1%. Historically, PF interest rates have remained higher than bank fixed deposits. (Read: How much time it will take to get Rs 1 crore with PPF).
2. Senior Citizen Savings Scheme (SCSS)
SCSS scheme can help senior citizens who don’t have a monthly pension or a monthly cash flow from any source to meet basic needs. Senior citizens can deposit up to Rs 15 lakh in an SCSS account and earn quarterly interest, which can be drawn in the linked savings account. The principal amount is returned to the investor after the completion of the maturity period, which he can use to reopen a new SCSS account or withdraw. (Read: How much senior citizens can get by depositing Rs 15 lakh in SCSS)
3. National Savings Certificate (NSC)
With 6.8% interest (compounded annually) NSC is another national Savings scheme with guaranteed returns and several other benefits, including tax deduction under Section 80C of the Income Tax Act. You can purchase NSCs for 5 years. If you purchase NSC for Rs 1000 today, it would grow to RS 1389.49 after five years at the current rate of interest. If planned wisely, you can also use NSC for regular monthly income.
4. Kisan Vikas Patra (KVP)
Kisan Vikas Patra is another scheme that you can look at for guaranteed returns. While tax benefits on KVP is not the same as PPF or NSC, it can help you double your money in 124 months. The current interest rate of KVP is 6.9%. (Read: More details about the KVP scheme)
5. Sukanya Smriddhi Yojana (SSY)
Sukanya Samriddhi Yojana helps parents save for their girl child. The SSY account provides a healthy interest rate of 7.6% per annum (calculated on yearly basis and yearly compounded). Apart from the better interest rate than bank FDs, deposits under the SSY scheme qualify for deduction under Section 80C. Interest earned on SSY deposits is also free from tax. (Read: More details about SSY account).