The days of hoarding wealth in homes as a favoured method of saving money for the future are long gone. With new strategies’ introduction and increased awareness, investing has become safer and more secure. These investment strategies have aided in developing individuals’ disciplined investing habits and the nation’s economy.
Saving schemes are a great means for sustaining financial corpus for one’s future plans and goals. It helps in achieving the objectives of individuals in the long run. For instance, saving schemes can help fulfil your children’s career goals or help you build the house of your dreams. These schemes cater to your needs by offering high returns on your investment. Keep reading to make your wealth building easy with these savings schemes.
Post Office Saving Schemes (SB)
A post office savings account is a government savings scheme provided by India Post. It is one the safest means of investing since it has minimal risks. Under this savings scheme, accounts can be opened by an individual alone or by two adults as a joint account. Conversion of an individual account to a joint account or vice versa is not permitted.
In case of the beneficiary’s death, the assured sum or fund value is transferred to the nominee. If it is a joint account, if an account holder passes away, the amount is transferred to the other account holder. The minimum deposit value for SB is 500 rupees, and the minimum withdrawal value is 50 rupees. When talking about the maximum limit, there is none.
National Savings Recurring Deposit Account (RD)
It is another savings scheme provided by India Post. The minimum amount to set up an account is 100 rupees; no maximum balance value can be retained under this scheme. The interest rates are compounded quarterly, and the interest rate for this RD account is 5.8 % per annum. Under this savings scheme, accounts can be opened by an individual alone or a joint account of up to 3 adults is permitted.
Account holders can opt for premature closure of RD accounts. After three years from the account opening date, the account may be terminated prematurely by submitting the required application form to the regional Post Office.
National Savings Time Deposit Account (TD)
Under this savings scheme, provided by the India Post, accounts can be opened by an individual alone or a joint account. (up to 3 adults are permitted). Individuals can open any number of TD accounts. The minimum amount for opening a TD account is 1000 rupees and/or in multiples of 100. No maximum value limit can be retained in a TD account.
The interest rates vary with the years and are payable annually but are calculated quarterly. When a TD account matures, the deposit amount shall be repaid after one, two, three, or five years, depending on the circumstances, since the account’s opening.
Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme is a secure way of saving for older adults. An individual can open account for this scheme above 60 years of age. A rule attached to joint accounts is that they can only be opened with spouses. The primary account holder alone will receive the maturity value of a joint account.
The minimum deposit value should be in multiples of 1000 rupees, and the maximum value retained in the account should not exceed 15 lakhs rupees. If the total interest earned across all the accounts crosses Rs. 50,000 in a fiscal year, the interest is taxable, and TDS at the legal rate must be subtracted from the total interest earned. If form 15 G/15H is presented and interest income does not exceed the permitted limit, no TDS will be charged.
Public Provident Fund Account (PPF)
A Public Provident Fund Account is a highly preferred and popular means of savings. Indian residents can open accounts for PPF. Only one PPF account can be opened across the country with either India Post or any bank of one’s choice. The interest rates for a PPF account are compounded quarterly.
The minimum value for opening a PPF account is 500 rupees, and the maximum is 1,50,000 rupees in a fiscal year. Deposits towards the account can either be made in deposits or a lump sum. Deposits made are subject to tax deduction under section 80C of the Income-tax Act.
Since the government provides these savings schemes, they ensure promised returns and secured investments. You can choose the best savings scheme for yourself by using an investment calculator. An investment calculator will help you in comparison of these schemes, assisting you in making the right choice when it comes to building your wealth.
Also Read: CRED App & the Savings You Can Make With It