For those seeking to invest in lucrative government-based schemes, India offers a plethora of options worth exploring. These schemes aim to cater to various needs, from securing the future of your loved ones to ensuring a comfortable retirement. Here are the top 6 government investment schemes in India:
Top 6 Best Government Investment Schemes in India
Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana was launched with a noble objective of encouraging parents to secure the future of their daughters. Introduced in 2015 under the ‘Beti Bachao, Beti Padhao’ campaign by Prime Minister Narendra Modi, this scheme is exclusively targeted towards minor girl children. Parents can open an SSY account in the name of their daughter from her birth until she turns 10 years old.
Investments in this scheme range from a minimum of INR 1,000 to a maximum of INR 1.5 lakh per year. The Sukanya Samriddhi scheme remains operative for 21 years from the date of opening, making it an excellent long-term investment.
National Pension Scheme (NPS)
The National Pension Scheme, popularly known as NPS, is one of India’s most famous government-backed retirement savings schemes. While it is open to all Indian citizens, it is mandatory for government employees. The NPS aims to provide a reliable retirement income to its subscribers.
Citizens and NRIs between the ages of 18 and 60 can subscribe to this scheme. The NPS allows you to allocate your funds across equity, corporate bonds, and government securities, providing a diverse investment portfolio. Additionally, investments up to INR 50,000 are eligible for deductions under section 80 CCD (1B), while further investments up to INR 1,50,000 are tax-deductible under Section 80C of the Income Tax Act.
Public Provident Fund (PPF)
The Public Provident Fund is one of India’s oldest and most reliable retirement schemes introduced by the Government. It offers a dual benefit of being a safe investment while also providing tax savings. The amount invested, interest earned, and the amount withdrawn, all are exempt from tax.
With a longer tenure of 15 years, PPF’s overall compounding interest, which is tax-free, becomes highly significant, especially during the later years. The current interest rate for PPF (FY 2020-21) is 7.1% p.a. Subscribers can claim tax deductions of up to INR 1,50,000 under Section 80C of the Income Tax Act. It’s worth noting that the Indian Government reviews the interest rate on PPF every quarter.
National Savings Certificate (NSC)
The National Savings Certificate is another government scheme aimed at promoting a savings habit among Indians. With a minimum investment amount of INR 100 and no maximum limit, NSC provides a flexible investment option.
The interest rate for NSC changes every year. As of 01.04.2020, the interest rate is 6.8% compounded annually and payable at maturity. Subscribers can claim a tax deduction of INR 1.5 lakh under Section 80C of the Income Tax Act. Only Indian residents are eligible to invest in this scheme.
Atal Pension Yojana (APY)
The Atal Pension Yojana, also known as APY, is a social security scheme aimed at providing pension benefits to workers in the unorganized sector. Eligible Indian citizens between the ages of 18 and 40 with a valid bank account can apply for this scheme. It encourages individuals from weaker sections to secure their old age financially.
APY can be availed by self-employed individuals as well. The only condition is that contributions must be made until the age of 60. This ensures a stable income during retirement.
Pradhan Mantri Jan Dhan Yojana (PMJDY)
Pradhan Mantri Jan Dhan Yojana aims to provide basic banking services such as Savings Account, deposit account, insurance, and pension to the economically vulnerable sections of society. The minimum age limit for a minor to join this scheme is 10 years, while any Indian resident above the age of 18 can open an account.
Subscribers to this scheme can only exit after reaching the age of 60 years, ensuring long-term financial security.
These government investment schemes in India present diverse opportunities to secure your financial future and lead a comfortable life during retirement. Choose the one that aligns with your financial goals and start investing wisely today.