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What is Savings Plan?

Savings is something which one makes to achieve a goal – either short term or long term. Currently, the money saved by a person, especially through a bank or any official Government scheme, is termed ‘Savings’.

A savings plan is a type of plan similar to life insurance that offers many possibilities to not only save money but also helps in multiplying it in a disciplined and systematic manner. This system helps meet the family’s financial needs and can ensure the fulfillment of financial goals at the time of need.

There are numerous savings plans available in the market which are offered by Banks, governments, Post Offices, and Corporates, making it difficult for the public to choose the right plan. One must always look at the pros and cons of a plan before making any investment decision.

Best Savings Plan

Following are the best savings plans to invest in 2022:

  • Senior Citizen Savings Scheme
  • National Savings Certificate (NSC)
  • Atal Pension Yojana
  • Public Provident Fund (PPF)
  • Recurring Deposits
  • Employee Provident Fund (EPF)
  • Post Office Monthly Income Scheme (MIS)
  • Pradhan Mantri Jan Dhan Yojana
  • KVP (Kisan Vikas Patra)
  • Sukanya Samriddhi Yojana (SSY)

Senior Citizen Savings Scheme

The senior citizen savings plan is one of the excellent tax-saving plans that offers its investors less risk, a high degree of safety, and regular income. This scheme has been made available through certified banks across India and Post offices.

The eligibility criteria for the investors saving in this plan are individuals at least sixty years old or individuals between 55 to 60 years of age who can invest only if they have chosen the Voluntary Retirement Scheme. Retired Defence Personnel who are 50 years of age or above can also invest. The maximum amount a person can invest is Rs. 15 Lakhs either through a personal or a joint account.

National Savings Certificate (NSC)

National savings certificate (NSC) is a fixed income scheme that can be opened only at Post offices. The main objective of this scheme is to motivate individuals to make small or medium savings. The minimum investment amount is Rs. 1000 for a tenure of 5 years with a 6.8% rate of interest. Under Section 80C of the Income Tax Act, investors can get tax benefits.

Public Provident Fund (PPF)

Public Provident Fund (PPF) is a long-term investment option that offers returns on investment and an attractive interest rate. The minimum investment amount is Rs. 500 for a tenure of 15 years, and the maximum amount is Rs. 1.5 lakh per annum.

Employee Provident Fund

EPF is considered the main scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952. EPF helps save money in the long run as there is no single lump sum investment. Generally, it is used in saving money at the time of retirement at the interest rate of 8.10%.

Conclusion

The market is flooded with numerous savings plans, and choosing the best savings plan can be difficult. Thus, we must consider every risk associated with the plan to make the right decision.