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 Account7.4% p.a. (Compounded Annually) 1.000Max Rs 15 lakhPersons 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 minorsTax 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 minorsDeposits qualify for tax exemption under 80C
Kisan Vikas Patra Account6.9% p.a. (Compounded Annually) 1000 No limit Individual and minorsThe interest is taxed but the amount received upon maturity is tax-free
Sukanya Samriddhi Account7.6% p.a. (Compounded Annually) 250Max 1.5 lakh per financial yearTo 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!”.

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