A lot of us park our money in Banks or Guaranteed instruments, here’s another investment option where you can do the same with a “Sovereign Guarantee”!!
What’s more there are various schemes available for different classes of people as well as for various tenures. So, I decided to compile a table with the various features as well as exact (of what’s actually required) details of which scheme you can opt for and how it can benefit your overall portfolio. If there is some debt recommended by your advisor / financial planner for your overall portfolio or financial goals – this could be a very attractive option. In the below chart also look out for the tax benefits not only during investment period but also while you get your returns (more importantly 🙂)
|Scheme||Interest Rate||Minimum Investment (Rs)||Maximum Investment||Eligibility||Tax Implications|
|Post Office Savings Account||4%||500||No limit||Individuals including Minors||Exempted Interest up to ₹10,000|
|National Savings Recurring Deposit Account||5.80%||100 per month in multiples of 10||No limit||Individuals including Minors||–|
|National Savings Time Deposit Account||5.5% – 6.7%||1,000 and multiples of 100||No limit||Individuals including minors||Section 80C deduction on deposits for 5 Years|
|National Savings Monthly Income Account||6.6% p.a. payable monthly||1,000||Max Rs 4.5 lakh for single A/C and Rs 9 lakh for Joint A/C||Individual including minors||The interest you earn is taxable and there are no deductions on the deposits, as per Sec 80 C|
|Senior Citizen Savings Scheme Account||7.4% p.a. (Compounded Annually)||1.000||Max Rs 15 lakh||Persons more than 60 years of age and above 50 years of age who have taken VRS or superannuation.||There are tax benefits on scheme deposits as per Sec 80 C|
Interest taxable if more than Rs 50,000
|Public Provident Fund Account (PPF)||7.1% p.a. (Compounded Annually)||500||Max 1.5 lakh per f financial year||Individual and minors||Tax relief available under section 80C for deposits|
Interest earned is tax-free
|National Savings Certificates (NSC)||6.8% p.a. (Compounded Annually)||1000||No Limit||Individual and minors||Deposits qualify for tax exemption under 80C|
|Kisan Vikas Patra Account||6.9% p.a. (Compounded Annually)||1000||No limit||Individual and minors||The interest is taxed but the amount received upon maturity is tax-free|
|Sukanya Samriddhi Account||7.6% p.a. (Compounded Annually)||250||Max 1.5 lakh per financial year||To be opened in the name of the girl child by the guardian||–|
Author: Mr Nirmal M Jain | Mr Nirmal M Jain is a Co-Founder at HappyWise Financial Services. He has helped over 100 Families over the last 15 years of his services in the Financial Planning Sector. He has been a mentor to several people to help them better understand investments, stocks, mutual funds, financial planning, personal finance and above all his favourite term “The Power Of Compounding!”.