Invest in these 5 government schemes; your money remains safe and earns interest—understand the full calculation..
Small Savings Schemes: Not everyone is comfortable with the risks associated with the stock market when it comes to investing money—especially when the funds are intended for children's education, retirement, or future needs.
For such investors, the government offers several small savings schemes. Investments in these schemes are governed by specific rules, and the interest rates are determined by the government. Schemes such as PPF, NSC, Sukanya Samriddhi Yojana, and the Senior Citizen Savings Scheme fall into this category.
1. PPF
The PPF (Public Provident Fund) is designed for long-term investment. It has a maturity period of 15 years. If you deposit ₹5,000 per month, your annual investment amounts to ₹60,000. Over 15 years, your total deposited amount would be ₹9 lakh.
Based on the current interest rate of 7.1%, this corpus could grow to approximately ₹16 lakh after 15 years—meaning about ₹7 lakh would be added through interest. The actual amount will depend on the deposit dates and the applicable interest rates over time. The government periodically revises the PPF interest rate.
2. Sukanya Samriddhi Yojana
If you wish to save for your daughter's future, the Sukanya Samriddhi Yojana is a viable option. The current interest rate is 8.2%. Depositing ₹3,000 per month results in an annual investment of ₹36,000. Over 15 years, the total deposited amount would be ₹5.40 lakh.
If returns remain close to the current interest rate, the corpus could reach approximately ₹17 lakh by the end of the 21-year maturity period. Please note that the interest rate for this scheme is subject to periodic revision; therefore, consider these figures as estimates.
3. Senior Citizen Savings Scheme
The SCSS (Senior Citizen Savings Scheme) is available for individuals aged 60 years or older. It is a suitable option for those seeking regular interest income after retirement. The current interest rate is 8.2%. Consequently, if someone deposits ₹10 lakh, the annual interest earned would be approximately ₹82,000. Interest is credited on a quarterly basis—meaning around ₹20,500 every quarter. Over a period of 5 years, the total interest earned would amount to approximately ₹4.10 lakh, assuming the rate remains constant throughout the tenure.
4. National Savings Certificate (NSC)
The National Savings Certificate (NSC) is designed for individuals who wish to earn interest by investing their money for a fixed tenure. The current interest rate is 7.7%, and the scheme has a tenure of 5 years.
If you invest ₹5 lakh in an NSC, the amount could grow to approximately ₹7.23 lakh after 5 years; this implies an interest gain of about ₹2.23 lakh. Interest on the NSC is compounded annually.
5. Kisan Vikas Patra (KVP)
In the Kisan Vikas Patra (KVP) scheme, the invested amount doubles over a fixed period. The current interest rate is 7.5%; at this rate, the investment doubles in 115 months—approximately 9 years and 7 months.
Based on this, if you invest ₹3 lakh in KVP, the amount could reach approximately ₹6 lakh upon maturity, yielding an interest gain of about ₹3 lakh. The maturity period for KVP is determined based on the interest rate applicable at the time of investment.
Which scheme is suitable for whom?
If your goal is long-term investment, you might consider the Public Provident Fund (PPF). For your daughter's future, you could look into the Sukanya Samriddhi Yojana. If you require regular interest income after retirement, the Senior Citizen Savings Scheme (SCSS) is an option worth considering.
On the other hand, if you wish to invest funds for a fixed tenure, options like NSC or KVP can be explored. Your investments in these schemes are not directly affected by daily market fluctuations.
Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
