7 Saving Schemes you Should Look Forward To, in 2018

Sometimes you want to put your money into investments that are not too risky. While equity-based investment options give higher returns, they are uncertain. If you wish to get stable returns with tax benefits, there are various best investment plan and saving schemes to invest in. You can avail tax benefits in banking saving schemes under Section 80C. Deduction under government-backed saving schemes has a maximum limit of Rs. 1.5 lakh. Schemes like NSC and PPF are now offered by banks along with post offices. These include:

 

Also Read: Why Equity Research Best for Investment?

1. Table of Contents

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   Fixed deposits:

Fixed deposits are long-term investment scheme offered by banks, post offices, and NBFC. In easy words, you deposit a fixed amount in a bank account for a fixed period and for a fixed return. A plan with a higher return and low penalty can be a best Fixed Deposit plan. However, the rate of returns mostly depends upon the amount invested and the tenure of the deposit. Different banks offer different interest rates on fixed deposits, which mostly vary, from 5 to 7 %. If you are ready to invest your money in a return- safe instrument, FD may be the best investment options for the long run.

  2. National Saving Certificate (NSC):

NSC is a government saving bond, which is used for small savings and tax savings. Earlier one could apply for NSC only from post offices, but now banks also offer them. NSC comes with two fixed maturity periods- 5 years and 10 years. It has a fixed interest, currently being 7.6% returns. You can avail a deduction in your income tax up to a limit of Rs. 1.5 lakh under Section 80C.

   3. Public Provident Fund (PPF):

PPF is a preferred small investment option by most people. It is a government-backed investment scheme with a lock-in period of 15 years that can be extended indefinitely every 5 years. You can withdraw from this scheme in the 6th year but not before that. The interest in PPF investment is revised every quarter. PPF falls under the Exempt-Exempt-Exempt schemes (EEE) which means the amount invested, interest earned and the maturity amount, all are exempt from tax. You can also claim deduction under Section 80C to a maximum limit of Rs. 1.5 lakh.

  4. Sukanya Samriddhi Yojana (SSY):

Investing for your girl child can help you save taxes. Under Sukanya Samriddhi Yojana, a small saving investment scheme you can make an investment in her name for a period of 21 years. A partial amount can be withdrawn after she attains 18 years for her higher education. The girl child should be below 10 years to be eligible for this investment. You can invest a minimum of Rs. 1000 to a maximum of Rs. 1.5 lakh in a year. SSY  falls under the Exempt-Exempt-Exempt tax benefit plan.. Moreover, you also get a deduction under Section 80C with SSY.

  5. Atal Pension Yojana (APY):

Atal Pension Yojana is a pension scheme focusing on the financial and social security of people employed in the unorganized sector. If you are an Indian citizen between the age group of 18 to 40 years, you can apply for this scheme. Under the APY scheme, you will receive the benefit of a fixed pension after the age of 60. The pension amount will depend on your contribution amount and tenure.

You can avail double tax benefits under this scheme. The investment is included in the deductible expenses under Section 80C up to Rs. 1.5 lakh. Moreover an additional deduction of Rs. 50,000 can be availed under Section 80CCD(1) through this scheme.

  6. Senior Citizen Saving Scheme (SCSS)

SCSS is an investment scheme catering only to senior citizens, offering long-term saving and security options. This scheme is available in certified banks and post offices across India. You should be 60 years or above to be eligible for this scheme. This too is available for deduction under Section 80C up to an overall limit of Rs. 1.5 lakh.

   7. National Pension Scheme (NPS):

NPS is a government-sponsored pension scheme open to employees from the public, private and unorganized sector. Under NPS, you can contribute to your pension account during your employment period.  The National Pension Scheme is quasi EET (Exempt Exempt Taxable), which means 40% corpus amount is exempt, while 60% is taxable. You can avail deduction in NPS under Section 80C. You can also avail a maximum deduction of  10% of salary, but no more than the said limit, under 80CCD(1). For a self-employed taxpayer, this limit is 20% of gross income. Under Section 80CCD(1B), you can avail Rs. 50,000 as a deduction on self-contribution over and above the deduction up to 1.5 lakh under Section 80C. 

Conclusion:

Banks and NBFCs help you save your money and can be a home to various investment and saving schemes. Based on your requirements and the return you expect out of them, you can choose the best investment option for your needs.