Great Small Savings Schemes - India

SIRU THULI PERU VELLAM...

Small savings very powerful, even though there are various financial options for a small investor...


1. Public Provident Fund (PPF)

The PPF ranks as one of the most attractive schemes within the gamut of small savings. It presently offers a return of 8% pa and runs over a 15-Yr period. The scheme promotes regular savings by ensuring that contributions are made every year to keep the account active; these contributions can vary from Rs 500 to Rs 70,000 pa.

2. National Savings Certificate (NSC)

NSC is another attractive instrument offering a return of 8% pa. Investors are required to make a single deposit and the interest component is returned along with the principal amount on maturity. NSC has an edge over its peers on account of a relatively lower tenure i.e. 6 years.


3. Kisan Vikas Patra (KVP)

KVP falls under the category of small saving schemes which don't offer any benefits under the Income Tax Act. The scheme runs over a tenure of 8 years and 7 months (which is a fairly longish horizon) and doubles the amount invested. This makes the return one of the most attractive one amongst its peers.


4. Post Office Monthly Income Scheme (POMIS)

As the name suggests, this scheme provides monthly income (at 8% pa) to investors. On competition of 6 years, a 10% bonus on the principal sum is provided.


5. Post Office Time Deposits (POTD)

Post Office Time Deposits are essentially fixed deposits of varying tenures offered under the domain of small saving schemes. These deposits are available for periods ranging from 1 year to 5 years with the interest rates varying correspondingly. Interest payments are made annually. POTD have emerged as one of the most favoured instruments in recent times.

6. Senior Citizens Savings Scheme (SCSS)

The scheme has been reserved for citizens above 60 years of age, albeit citizens above 55 years can invest in the same subject to certain conditions being fulfilled. SCSS offers a return of 9% pa, making it a must have proposition for the target audience. The SCSS in tandem with the POMIS can prove to be a very lucrative option for senior citizens who need regular income without taking on any risk.