Best Government Savings Schemes: There are many options available for investing your hard-earned money. Investors have many options offered by the government and government financial institutions. Through these many important goals like children’s education, marriage, retirement can be fulfilled. Investors can choose from savings options as per their risk profile. The major government investment schemes that are well-liked among investors include PPF, NSC, Post Office Savings Account, KVP etc. Most of these government savings schemes are reliable, low risk and safe.
According to experts, some of these schemes are very effective for generating large capital in the long run as they are not affected by market volatility. The interest rates of some of these savings schemes are fixed on a quarterly or half yearly basis depending on the cost and inflation. Below are information about the major investment options and their special features.
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Public Provident Fund (PPF)
- It can be started by investing a minimum of Rs 500 annually.
- The maximum investment that can be made in PPF in a year is Rs 1.5 lakh.
- The interest on investment in PPF is compounded every year at the rate of 7.1 per cent per annum.
- You can claim tax deduction on investments up to Rs 1.5 lakh.
National Savings Certificate (NSC)
- One can invest a minimum of Rs 1000 under NSC.
- There is no maximum investment limit.
- The interest on the investment is compounded annually at the rate of 6.8 percent per annum.
- Deduction can be claimed on deposits up to Rs 1.5 lakh.
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post office savings account
- Any resident individual can start investing in it with a minimum of Rs 500.
- There is no maximum limit for investment in this account.
- Interest is earned at the rate of 4 per cent per annum.
- The interest earned on the amount deposited in the account is tax free.
post office time deposit
- Under this, you can invest a minimum of Rs 100, there is no limit on the maximum investment.
- The amount invested earns interest at the rate of 5.5 per cent for the first three years and 6.7 per cent on the deposit tenure of 5 years.
- Under Section 80C of the Income Tax Act, 1961, the benefit of deduction is available for 5 years on deposits.
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post office recurring deposit
- Under this, you can invest a minimum of Rs 100, there is no limit on the maximum investment.
- Deposits can be made singly or jointly.
- Interest is available at the rate of 5.8 percent.
- Interest is taxable and no deduction is available on deposits.
Post Office Monthly Income Scheme (POMIS)
- Under the scheme, a minimum of Rs 1 thousand and a maximum of Rs 4.5 lakh can be deposited in a single account and Rs 9 lakh in a joint account.
- Interest is earned every month on the investment at the rate of 6.6 percent per annum.
- Tax liability is created on interest, no deduction is available on deposits also.
Kisan Vikas Patra (KVP)
- Under this, an individual can invest a minimum of Rs 1 thousand, there is no limit on the maximum investment.
- The interest on the investment is compounded annually at the rate of 6.9 per cent per annum.
- Interest and the amount received on maturity are tax exempt.
- The amount invested doubles in 124 months (10 years and four months).
(Article: Priyadarshini Maji)
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