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Savings Schemes in India - Interest Rates, Eligibilities and More

October 9, 2023

Table of Contents

    Table of Contents

      Learn about the best saving schemes in India: From Fixed Deposits to PPF, explore smart ways to grow your wealth and secure your financial future. Get expert insights on top savings options in India!"

      The savings schemes are launched by the Government of India or any public or private sector banks or any other financial institutions.

      The main aim of these schemes is to help the citizens during tough times and offer them financial help for a particular time.

      Why should you invest in saving schemes?

      There are multiple important reasons why you should apply for a savings scheme in India.

      1. Security

      If you invest your earnings in a savings scheme, your chances of keeping the money safe and secure increase. Furthermore, a savings scheme shall turn out to be a lifesaver during your retirement period. Contributing money saving scheme Will help you enjoy your retirement days.

      1. Tax Savings

      Many reliable savings schemes in India offer fantastic tax benefits to their users. You can avail tax deductions and tax exemptions with the help of a convenient savings scheme.

      1. Make Savings a regular habit

      We cannot finish listing the importance of saving finances. A good savings scheme will encourage you not to spend much. savings schemes in India will help you achieve your financial goals as well.

      How to Choose the Right Saving Scheme?

      Saving schemes will help you during financial emergencies.

      With a convenient saving scheme, you shall have a safe and secure life. While there is no strict procedure on how to choose the best savings scheme, however, there are certain important things that you must keep in mind.

      For example, always assess the risk of investing in a particular scheme. Many saving schemes in India offer fantastic returns but unfortunately, they come with high risks. Secondly, your savings scheme must be based on your objective.

      You must choose a particular scheme based on your long-term financial targets. Thirdly, always know the lock-in period. Before investing in a scheme. It is necessary to know this beforehand because you cannot withdraw your money before the end of the lock-in period.

      Unfortunately, several saving schemes in India are not eligible for all., You must ensure that you are eligible for the particular scheme. You must further check the interest rate that the scheme offers. 

      What are the Best Saving Schemes in India?

      Saving schemes will help you accumulate your wealth. In order to enjoy high returns for a long period of time, it is advisable to invest in a proper saving scheme from an early stage. Do you want to check out some of the best monthly savings schemes in India?  Here are some of the best savings schemes in India.

      ELSS Mutual Funds

      The ELSS is a type of mutual fund that enables you to save on taxes.

      These mutual funds are eligible for tax deductions under Section 80C of the Income Tax Act, of 1861. What makes this saving scheme one of the best is that you can reduce your taxable income up to Rs. 1,50,000/- each year. This will further enable you to save rupees 46,800 in taxes every year!

      Some of the highlights of the saving scheme are-

      • It offers a compulsory lock-in period of three years.
      • No upper limit on the amount that you can invest. However, the minimum amount of investment varies.
      • With this saving scheme, you shall get mind-blowing returns.
      • The ELSS saving scheme shall help you reduce your tax liability
      • With the ELSS scheme, you can invest in stocks.

      Fixed Deposits (FDs)

      FDs are fixed-term investments that offer a minimum lock-in period of 5 years.

      You can make this investment in any convenient public or private bank or even at the post office. The interest rate varies from bank to bank and the minimum amount of investment is usually Rs. 100/-

      Some of the features of this saving scheme are-

      • In accordance with Section 80C of the Income Tax Act of 1861, you are entitled to tax exemptions.
      • Senior citizens are offered at least a 0.50% hike in interest.
      • You can apply for the savings scheme even if you have a joint account. In that case, the primary account holders will receive the tax benefits.

      Public Provident Fund (PPF)

      One of the most popular schemes in India, the Public Provident Fund or the PPF currently offers an annual interest rate of 7.1%.

      Your earned interest is not eligible for taxation. The PPF is preferred by many Indian citizens because of its attractive interest rate, tax benefits and convenience.

      Some of the features of this saving scheme are-

      • The PPF offers a minimum tenure of 15 years which can be increased at convenience
      • It offers a minimum investment of Rs. 500/- and a maximum investment of Rs. 1.5 lakh in each year.
      • The PPF is backed by the Government it ensures safety is generally risk-free

      National Pension Scheme

      The National Pension Scheme is sponsored by the Indian Government.

      With this scheme, you can contribute a part of your earnings into a separate pension fund. On retirement, that amount can be withdrawn in a lump sum.

      Some of the features of this saving scheme are-

      • Easy and hassle-free account opening.
      • You can initiate the scheme with just Rs.1000/- p.a.
      • It offers higher returns

      Pradhan Mantri Jan Dhan Yojana (PMJDY)

      PMJDY is a nationwide scheme launched by the Indian Government in 2014 with the primary objective of providing financial assistance to citizens without any funds in their banks.

      The user shall be provided with a debit card which is accessible in all ATMs in India.

      Some of the benefits of this saving scheme are

      • With this saving scheme, the account holder can apply for an overdraft of up to Rs.10,000/-
      • The account holder if met with unforeseen circumstances shall receive an accidental insurance cover. The amount of the cover varies and is subject to conditions.
      • This saving scheme also offers a mobile banking facility to all its users which makes it convenient to check bank balance and transfer funds.

      Short term Savings Scheme

      Are you looking for short-term investment options? In that case, a 3-year savings scheme may be the best one for you. Here are some of the best 3-year savings schemes available in India.

      Savings account

      Savings accounts can be one of the best 3-year savings schemes available in India.

      The best part is that you can withdraw your deposited amount anytime you want and certain banks provide a decent amount of interest as well.


      Indian citizens can invest in gold for three years.

      Gold investments can be one of the most stable investments that you can find and it usually offers attractive returns subject to market risks.

      Recurring deposits 

      You should choose this type of plan if you plan to deposit money every month.

      Recurring deposits can be one of the safest modes of investment available in India.

      However, fixed deposits usually offer a higher rate of interest.

      Which Saving Scheme has the Highest Interest Rate?

      Although the interest rates of each saving scheme available in India vary, certain Government schemes in India usually offer some of the highest interest rates to their users.

      Senior Citizen’s Savings Scheme 

      This scheme is for senior citizens aged 60 years. This savings scheme is for five years. Once the maturity is over, the user can extend the tenure for a period of three years.

      Kisan Vikas Patra

      This scheme has been introduced by the Post Office of India. This scheme usually offers interest rates of 7% and more.

      Sukannya Samridhhi Yojana

      The Government of India introduced this scheme to aid a girl child's financial well-being.

      Saving Schemes for Women

      India also offers certain saving schemes which are especially for the ladies. These schemes are usually safe and risk-free. Some of the saving schemes available for ladies in India are-

      SIP (Systematic Investment Plan)

      Women in India can start saving through a Systematic Investment scheme.

      The investment can be either in a monthly mode or in a quarterly mode. What makes it safe for women in India is that SIPs usually have low to medium risks.


      Purchasing gold has always been the trend for the Indian woman.

      In most cases, gold gives guaranteed returns, making it a safe investment for Indian women.

      It has been observed that even when the market falls, investment in gold has never disappointed us.

      National Pension Scheme

      All the women investors in India who are also working invest in this National Pension Scheme.

      You can apply if you are a woman over 18 years of age and not over 65 years of age. The minimum balance to open the account is Rs. 500/- for the Tier I account and Rs.1000/- for the Tier II account.

      With this scheme, women investors shall also enjoy tax benefits(If they open a Tier I account)


      The PPF is a risk-free investment model available to the Indian woman.

      Since it is backed by the government, it is quite safe and is one of the best investment options for women. The investor shall also receive several tax benefits under this scheme.