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13 Best Savings Plans In India

Saving is a very important part of our life. We can’t afford to spend our hard-earned money on unnecessary things. In India, people save for their future and for the time when they need it. While saving your money is excellent, it becomes better when you get paid to save it.
Savings plans in India are one of the best ways to save money and get a decent interest rate simultaneously. Investing in saving plans is an excellent idea if you want to save some cash and manage your finances better. This blog will give you all the information about saving plans available in India.

What are Savings Plans?

Savings plans are a way to save money, which is why they are so popular. They can be used by anyone, no matter what their financial situation. The best part about them is that they don’t require any additional effort on your part. All you need to do is find a plan that suits you and then stick to it religiously.

Savings plans come in many different forms, from small amounts of money every month to larger amounts of money once or twice a year. Some savings plans require you to set aside a percentage of your paycheck each month or week, while others allow you to make lump-sum payments at any time during the year. You can even combine multiple savings plans together if necessary! With savings plans, you’re guaranteed interest on your deposits — often as much as 8.6% — and there are no fees associated with these accounts.

The most important thing about savings plans is that they should be easy for you to follow and understand. If it seems too complicated or confusing, then it’s probably not worth doing (unless there’s a very good reason).

Key Features of Savings Plan

Life Cover

A life cover is a term used for a financial product that covers the survivor in case of death or disability. This is the most important feature that every saver should look for in a savings plan.

Maturity Benefit

Mostly every savings plan that you can find in India these days, comes with a maturity benefit. Some of the best savings plans have also started giving bonuses on your maturity period, enabling you to meet your financial goals faster.

Flexible Premium Payment

A savings plan gives you complete flexibility on your payments which means that you can choose to pay monthly, quarterly, half-yearly, or annually as per your convenience.

Steady Returns

Putting your money in a savings plan comes with a bare minimum risk which means that they can provide you with safe and steady returns.

Benefits of Savings Plans


Financial Protection

A savings plan can help you manage your family’s finances better and prevent unforeseen expenses from occurring. If you have a savings plan, you will know how much money is available for emergencies or unexpected costs. This will also help you plan for the future and invest wisely for your retirement.


Tax Savings

Another benefit of having a savings plan is that it can allow you to save more money without paying taxes on it. You may be required to pay taxes on some of your investments, so having a savings plan can help reduce or even eliminate this burden from your shoulders!


Retirement Planning

Having a retirement plan is essential for everyone, whether they work full-time or part-time or are self-employed. It helps keep track of your income and expenses, making it easier to save for retirement or make sure that any extra money goes toward paying off debts or other expenses. Having a savings plan contributes to your retirement plans by allowing you to save money without any hassle and even earn interest on it.

List of Best Savings Plans in 2022

Sr. No. Savings Schemes/Plans Returns Offered Lock-in Period
1 National Saving Certificate (NSC) 6.8% 5 Years
2 Senior Citizens Saving Scheme (SCSS) 7.4% 5 Years
3 Recurring Deposit 7.2% 1 Year
4 Post Office Monthly Income Scheme (POMIS) 6.6% 5 Years
5 Kisan Vikas Patra 6.9% 2.6 Years
6 Public Provident Fund (PPF) 7.1% 15 to 20 Years
7 Sukanya Samriddhi Yojana (SSY) 7.6% 21 Years
8 Atal Pension Yojana (APY) Returns depend on contributions Age 60 Years
9 Employee Provident Fund (EPF) 8.1% Retirement or Resignation
10 Pradhan Mantri Jan Dhan Yojana 4% NA
11 Equity Linked Savings Scheme (ELSS) Depends on market conditions; there are no assured returns. Min 3 Years
12 Fixed Deposits Varies from bank to bank Min 5 Years
13 National Pension Scheme (NPS) 6.92% – 14.29% Till Retirement (age 60)

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Best Savings Plans in India

1. National Savings Certificate (NSC)


National Savings Certificate (NSC)

The National Savings Certificate (NSC) is a fixed income saving plan that one can open with any post office in India. The government introduced it to encourage small investors, mainly those who fall under the small or mid-income categories, to invest while saving on income tax. NSCs are available with two fixed maturity years: five and ten years. Also, there is no limit on the maximum number of NSCs that one can purchase. However, investments up to Rs 1 lakh fifty thousand annually in this savings plan can earn a tax break according to Section 80C of the Income Tax Act.

To begin with this scheme, you need to buy a National Savings Certificate. The amount you choose will be considered as your investment. After the investment is made, according to rates associated with the type of certificate bought, an interest rate is earned. As mentioned earlier, the maturity for these certificates is set to five or ten years from the date of purchase. The interest, on the other hand, is calculated on a yearly basis.

2. Senior Citizen Savings Scheme


Senior Citizen Savings Scheme

The SCSS savings plan is a safe and reliable investment option for Indians. It's developed by the Indian government and is supported by the finance ministry. The maximum amount that you can invest in this scheme is Rs 15 lakh either through a single or joint account. Another factor to take note of is that the amount that will be invested in the scheme should not be more than the money which is received at retirement.

The eligibility for investors is people over 55 who are getting pension benefits from the government or who have chosen to retire from their jobs early. You can get started with this savings plan by using cash or a cheque. When you are investing an amount below 1 lakh, but anything above that can be invested using a cheque as well.

The average tenure of this savings plan is five years but can be extended for three more years. Tax deduction up to Rs. 1,50,000 can be claimed as per Section 80C of the Indian Income Tax Act. If the account is closed after a year, but before the term of two years, 1.5% of the amount deposited will be subject to deductions as charges for pre-mature withdrawal.

If the account is closed after two years, but before the term of three years, 1% of the invested amount will be subject to deductions as charges for pre-mature withdrawal. Only one extension will be allowed per investor; these extended accounts can be closed after a year of extension without any penalty.

3. Recurring Deposits


Recurring Deposits

Recurring deposits are recurring payments made to your account regularly. These are usually in the form of fixed deposits, and it allows you to save up money for a longer period of time.

The main advantage of having recurring deposits is that you can set aside a fixed amount of money, which will be automatically withdrawn from your account at intervals. This ensures that you don't have to worry about wasting your money when there's no cash in your bank account.

The other advantage is that it helps you stay disciplined and save regularly without worrying about tracking the balance or doing anything else with the money other than saving it. The minimum amount to start a Recurring Deposit is Rs.500 for a bank, whereas you can start it from as low as Rs.10 at your local post office.

The interest rate on these recurring deposits differs for every bank however, post offices across India offer a fixed rate of interest of 8.4%

4. Post Office Monthly Income Scheme


Post Office Monthly Income Scheme

The Post Office Monthly Income Scheme (MPI) is a savings and investment programme under which you can save money at the post office. The scheme allows you to deposit money into your account monthly and earn interest on it. It's a low-risk monthly income scheme that helps you to generate money every month. This savings scheme is available to all the Indians living in the country, and even minors above the age of 10 can get started with this.

The MPI has many benefits:

  • It's free. You need to pay no charges or fees for the MPI.
  • It's convenient. You can make deposits by cash, cheque, or RTGS transfer at any post office across India.
  • You can withdraw money from your MPI account any time you want without incurring fees.

5. KVP (Kisan Vikas Patra)


KVP (Kisan Vikas Patra)

Kisan Vikas Patra is a safe savings plan that is backed by the government. Though at the start it was mainly for farmers, now it is open to other sections of society and is seen as a very attractive investment. You can opt for this saving plan if you are an adult Indian citizen. This scheme offers a rate of return of 6.9% per annum (last updated on 25th Jan 2022)

The minimum amount you can invest is Rs 1000, and there are no maximum limits on how much you can put into this plan. The KVP offers a higher return than some of the banks, and it can double your money in a time frame of 124 months—in 10 years and 4 months.

6. Public Provident Fund (PPF)


Public Provident Fund (PPF)

The National Savings Institute was introduced by the Public Provident Fund in the year 1968. It is the safest and most popular option for saving in India. Contributions made to the PPF account can be claimed as tax deductions under section 80C of the Income Tax Act, if one invests up to Rs.1.5 lakhs per financial year. The annual interest rate on deposits is 7.6%, compounded annually, but you can make a minimum contribution of Rs.500 per year to your account and invest up to Rs.1.5 lakhs during a single financial year.

The benefits of PPF are payable as lump-sum payments or quarterly deposits over 12 months, depending on when you take out your money from the scheme; note that early withdrawals from your account before age 59½ mean that you'll pay income tax on any gains made from this withdrawal.

PPF allows you the flexibility to transfer funds from one bank branch or post office branch to another. Withdrawals made at any other branch will attract transaction charges, though there are no restrictions on how often you can switch between banks or post offices before deciding whether or not you wish to continue with your investments in PPF.

7. Sukanya Samriddhi Yojana (SSY)


Sukanya Samriddhi Yojana (SSY)

The Sukanya Samriddhi Yojana is a government savings scheme that allows parents or legal guardians to open an account for a girl child who is 10 years old or younger. The account matures after 21 years of opening the account or in the event of the marriage of the child after she gains the age of 18 years. A premature withdrawal from the account of up to 50% of what was initially invested is allowed after she reaches 18 years old, even if she is not getting married. The features for the Sukanya Samriddhi Yojana scheme are listed below:

Duration of Investment in this Savings Scheme: 21 Years

Interest Rate: 8.5%

Investment Amount: Minimum Rs.1,000 per annum, Maximum: Rs.1.5 Lakhs Per Annum

Interest Received will not be taxed.

Tax Deduction on Principal up to Rs 1.5 lakhs.

8. Atal Pension Yojana


Atal Pension Yojana

The Atal Pension Yojana (APY) is a government-initiated savings scheme that provides regular income to the weaker section of society. It's for people who work in the unorganized sector and for those who need financial support from the government-sponsored welfare program. The APY serves as a lucrative pension plan for post-retirement years. To apply for this scheme, you must be 18–45 years old and have an active savings bank account. The premium rate on Atal Pension Yojna is exceptionally low, and you have to pay it for a minimum tenure of 20 years. However, the individuals who pay higher premiums will also be offered the highest pension coverage.

9. Employee Provident Fund (EPF)


Employee Provident Fund (EPF)

The Employee Provident Fund Organization (EPF) is a government-run retirement savings scheme, wherein salaried individuals must make an equal financial contribution towards their Provident Fund (PF) account. EPF helps individuals to plan their retirement in advance so that they can spend their golden days of retirement in peace and serenity. Moreover, the EPF scheme also helps the individuals fulfill their financial objectives in life and help them deal with any type of emergencies.

In this scheme, the employer and employee make equal contributions of 12% of the employees' monthly salary to their PF accounts. An equal amount of money is added to your PF account each month. The interest rate on these contributions is 8%-12%. As soon as 1st April comes around every year, you'll receive interest on your contribution.

10. Pradhan Mantri Jan Dhan Yojana


Pradhan Mantri Jan Dhan Yojana

Pradhan Mantri Jan Dhan Yojana (PMJDY) is an ambitious scheme of the Government of India to provide basic banking services such as cash access, insurance benefits, and pension to every household in the country. Under the scheme, all homes are entitled to receive a bank account with zero balance, a debit card, access to overdraft facilities, and a life insurance cover.

The scheme will also help reduce corruption, promote transparency and accountability, enhance tax compliance, enable citizen engagement, and improve governance. People who join this scheme can earn interest on the money they deposit in their banks. The beneficiary of this scheme is also eligible for direct benefit transfer. In addition, the overdraft facility of upto Rs.5000 is also offered to the account holder, which isn't applicable to more than one account per person.

11. Equity Linked Saving schemes


Equity Linked Saving schemes

Equity Linked Saving Schemes, also known as ELSS Mutual Funds, is a type of mutual fund that invests in stocks and bonds. The terms "equity-linked" and "equity" are used interchangeably to refer to these funds. They invest in stocks, but they also have an investment option where they can invest in debt instruments like government bonds or corporate bonds.

The primary advantage of ELSS is that you can avoid paying a management fee for the fund manager, who collects money from you every year to manage your money. You will not be charged anything from your investment, and this is true even if you do not make any withdrawals. This means that you only have to pay taxes on capital gains made from your investments when you sell them off after three years when you get back all the principal amount plus interest earned on the funds invested.

Another advantage of ELSS is tax benefits since this is considered a long-term saving scheme as compared to a regular savings account where interest is taxable if it exceeds Rs 10,000 per year.

12. Fixed Deposits


Fixed Deposits

A fixed deposit is a type of bank account that allows you to lock in your money for a fixed period of time. The amount you deposit will be held in the bank's savings account, locked in, and not available for withdrawal until the maturity date.

Fixed deposits offer a great deal of security and peace of mind since they are typically FDs that are linked to your bank account, so if you lose your job, or get sick and can't work, you still have access to the value of your FDs.

There are several different types of Fixed Deposits available, and each one has different features and risks attached to it. Before you choose one, it is important to understand how they work so that you can make an informed decision about which one will suit your needs best. Locking your money in a fixed deposit allows you to get impressive interest rates on your money while keeping it safe. Fixed deposits are a perfect option for people looking to grow their money without taking much risk.

13. National Pension Scheme


National Pension Scheme

The National Pension Scheme (NPS) is a unique retirement savings product that aims to provide a steady income in your old age. The NPS is an employee-owned and managed scheme, which means that employees contribute to it as a part of their salary. The contributions are deducted from your salary as per the rules laid down by the central government.

The main aim of these schemes is to provide a secure retirement for workers and their families. However, there are many other benefits that can be received by employees who participate in this scheme. For example, you can earn interest on your contributions and also get access to social security benefits like medical insurance or provident funds.

How Does the NPS Work?

The basic idea behind NPS is simple: You contribute a percentage of your salary towards retirement savings, and then these contributions are matched by the employer or government employee contribution. This way, you get a double benefit — your savings grow faster because of the contribution made by you and the employer. Secondly, your money is invested in various investments that increase in value over time. These include public provident funds (PPF), equity mutual funds, and fixed deposit schemes.

The NPS is available to all salaried employees who have been contributing regularly to a registered pension scheme.


Saving is important, and we should always plan for the future. We can’t predict how much we’ll need in the future, but that’s all the more reason to start saving now. Even if you can only put a few rupees every week into your savings, it all adds up in the long run. These are just a few of many ways to save for your future; hopefully, they can help you get started making smarter financial decisions today.