To secure their future and maintain financial stability even after retirement, people are engaging in various types of financial planning. Some turn to the stock market, while others prioritise investing in gold or bonds. However, a large number of investors still rely on bank fixed deposit schemes due to their aversion to risk. Many people are unaware of government schemes that offer higher returns and better security than FDs today. These schemes, operated by the Post Office, are not only secure but also offer tax-saving benefits.
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Why Government Schemes Can Be a Better Option
Currently, FDs offer an average interest rate of 6 to 7 percent. Many small savings schemes offered by the Post Office provide higher interest rates and are backed by the government. This means the capital is secure, returns are stable, and a good fund can be built over the long term. Three such schemes are explained in detail below.
National Savings Certificate
The National Savings Certificate (NSC) is a highly reliable small savings scheme operated by the government. It offers an annual interest rate of approximately 7.7 percent, which is significantly higher than typical FDs. This scheme is especially designed for small investors who want to grow their savings securely. Investments in this scheme also qualify for tax benefits under Section 80C. It has a maturity period of five years, making it helpful in achieving medium-term financial goals.
Public Provident Fund
The Public Provident Fund (PPF) has long been one of the most preferred schemes for Indian families. This scheme is operated under the Post Office and offers an annual interest rate of 7.1 percent. Its biggest advantage is that it involves no risk and provides a strong fund over the long term. It has a lock-in period of 15 years, which can be extended for periods of 5 years each, up to a maximum of 25 years if needed. The amount deposited, the interest earned, and the amount withdrawn from PPF are all tax-free. Additionally, investments up to ₹1.5 lakh per year are eligible for tax savings under Section 80C.
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Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana is a flagship government scheme for securing the future of girl children. It can be opened in the name of a girl child under the age of 10, and investments are made for 15 years. The account matures when the girl turns 21, providing a substantial lump sum. The most attractive feature of this scheme is the high interest rate of 8.2 percent, which is significantly higher than many other investment options available today. A family can open accounts for two daughters, and in the case of twins, three accounts can be opened. This scheme is considered an excellent option for securing a daughter’s education and future.