Best Savings Schemes In India

Saving schemes are designed by the government and financial institutions to help individuals save money and earn returns. Popular options include PPF, NPS, ELSS, and fixed deposits. You can achieve financial goals like retirement security, education funding, or financial independence by selecting the right savings scheme and contributing regularly.

79 Views
Updated on: Jul 11, 2025

Start Assured Savings

What are Saving Schemes?

Saving schemes are financial plans designed to help individuals save money systematically and grow their wealth over time. These schemes are often offered by banks, post offices, or the government and serve dual purposes. First, they help individuals achieve financial goals, such as securing retirement, saving for education, or building an emergency fund.

Further, they also contribute to the nation’s economic growth. When people save money in savings schemes, the government or financial institutions utilize these funds for infrastructure development, public welfare projects, and boosting the economy. In this way, these schemes help direct excess funds lying idle with individuals to their best possible use.

Types of Best Saving Schemes In India 2024

Government and financial institutions recognize that no two individuals will have the same risk profile or financial goals. Therefore, they have come up with a diverse range of saving schemes for each category of individuals. From tax-saving options to retirement-focused plans, these schemes are designed to secure your future while offering attractive returns.

Here’s a closer look at some of the best monthly saving schemes available.

Tax Saving Fixed Deposits

Tax-saving FDs are a popular choice for individuals seeking safety and tax benefits under Section 80C.

Lock-in Period: 5 years, during which premature withdrawals are not allowed
Tax Benefits: Up to ₹1.5 lakh deduction under Section 80C
Interest Rate: Varies between banks, usually higher than regular savings accounts
Risk Level: Low-risk, making it ideal for conservative investors
Interest Taxability: Interest earned is taxable under the investor’s income slab

Unit Linked Insurance Plan (ULIP)

If you are aiming to earn investment returns while securing life insurance coverage for your loved ones, Unit Linked Insurance Plans are the right choice for you.

Dual Benefits: Combines life insurance coverage and investment in equity, debt, or balanced funds
Lock-in Period: 5 years, promoting disciplined savings
Tax Benefits: Premiums qualify for tax deductions under Section 80C; maturity proceeds are tax-exempt under Section 10(10D) (subject to conditions)
Returns: Market-linked, dependent on fund performance
Flexibility: Option to switch between equity and debt funds during the policy term

Equity Linked Savings Scheme (ELSS)

ELSS is a tax-saving mutual fund that primarily invests in equities. It is suitable for individuals willing to take moderate risks for better returns and high growth potential.

Lock-in Period: 3 years, the shortest among Section 80C options
Investment Type: Primarily invests in equities
Tax Benefits: Up to ₹1.5 lakh deduction under Section 80C
Returns: Market-dependent but historically higher over the long term
Risk Level: Moderate to high, depending on market performance

Sukanya Samriddhi Yojana (SSY)

Designed for the financial well-being of girl children, Sukanya Samriddhi Yojana is a government-backed scheme offering attractive interest rates and tax benefits. Parents can open this account to secure funds for their daughter’s education or marriage

Eligibility: Open to parents/guardians of girls below 10 years of age
Tenure: 21 years or until the girl’s marriage after 18 years of age
Interest Rate: Revised quarterly by the government
Tax Benefits: Contributions qualify for Section 80C deductions, and interest/maturity proceeds are tax-free
Minimum/Maximum Deposit: ₹250 to ₹1.5 lakh per year

National Pension Scheme (NPS)

The National Pension System is a government initiative to help individuals save for retirement. It offers investment options in equity, corporate bonds, and government securities. Contributions are tax-deductible, and the scheme provides a mix of safety and growth.

Eligibility: Open to all individuals aged 18-70
Tax Benefits: Contributions up to ₹2 lakh are deductible under Sections 80C and 80CCD(1B)
Returns: Market-linked, based on the chosen investment mix
Withdrawals: Partial withdrawal is allowed after 3 years. You can withdraw the full amount at 60, with a portion mandatorily used for annuity purchase

Senior Citizen Saving Scheme (SCSS)

SCSS is exclusively for individuals aged 60 and above. It offers high returns and quarterly payouts to ensure senior citizens can live comfortable lives after retirement.

Tenure: 5 years, extendable by 3 years
Interest Rate: High, revised quarterly by the government
Tax Benefits: Contributions eligible under Section 80C
Payout Frequency: Quarterly interest payouts ensure regular income
Investment Limit: Maximum of ₹15 lakh per individual

Public Provident Fund (PPF)

PPF is a long-term savings scheme offering tax-free returns with a 15-year lock-in period. The scheme provides a secure investment option with guaranteed returns and tax deductions.

Tenure: 15 years, extendable in 5-year blocks
Interest Rate: Government-determined and tax-free
Tax Benefits: Contributions are deductible under Section 80C, and returns are fully tax-exempt
Investment Limits: ₹500 to ₹1.5 lakh per year
Risk Level: Zero risk due to government backing

National Savings Certificates (NSC)

National Savings Certificate is a fixed-income savings scheme that offers guaranteed returns and tax benefits. It has a five-year tenure and is ideal for risk-averse investors looking for secure and predictable growth.

Tenure: 5 years
Interest Rate: Fixed and compounded annually but paid on maturity
Tax Benefits: Eligible under Section 80C
Risk Level: Low
Minimum Investment: ₹100 with no upper limit

Post Office Savings Scheme

The Post Office Savings Scheme is a government-backed initiative providing a safe option for savings. It offers a low-risk investment avenue with moderate returns, ideal for conservative investors.

Interest Rate: Competitive, revised quarterly
Account Type: Single or joint account options
Accessibility: Available across all post offices
Risk Level: Zero risk due to government guarantee

Post Office Time Deposit

This scheme is similar to a bank fixed deposit and offers attractive interest rates for different tenures, ranging from one to five years. It provides guaranteed returns and a safe investment option.

Tenure Options: 1, 2, 3, or 5 years
Interest Rate: Higher for longer tenures; 5-year deposits qualify for Section 80C
Risk Level: Secure and reliable

Post Office Monthly Income Scheme (POMIS)

Post Office Monthly Income Schemes (POMIS ) are low-risk schemes that offer a fixed monthly income. It is suitable for individuals looking for a steady cash flow without the risk of market fluctuations.

Tenure: 5 years
Interest Rate: Fixed and paid monthly
Investment Limits: ₹1,000 minimum; ₹9 lakh maximum (₹15 lakh for joint accounts)
Risk Level: Low-risk, with capital safety

Post Office Recurring Deposit

This scheme allows individuals to build a corpus over time through small monthly deposits. It is ideal for those looking to cultivate a disciplined savings habit with a guaranteed return.

Tenure: 5 years
Interest Rate: Compounded quarterly
Minimum Investment: ₹100 per month with no upper limit
Risk Level: Safe and reliable

Employees’ Provident Fund (EPF)

EPF is a retirement savings scheme for salaried employees, where both the employer and employee contribute. It ensures a secure financial future post-retirement and offers tax benefits.

Contributions: Both employer and employee contribute 12% of the employee’s salary
Tax Benefits: Employer contributions are tax-free, and employee contributions qualify under Section 80C
Returns: Interest is government-regulated and tax-free

Kisan Vikas Patra (KVP)

KVP is a government savings certificate that doubles your investment in a pre-specified period. It is a safe option for those looking for assured returns and financial growth.

Tenure: Depends on the prevailing interest rate; usually 10–12 years
Interest Rate: Fixed, compounded annually
Eligibility: Open to all Indian residents
Minimum Investment: ₹1,000 with no upper limit

Mahila Samman Bachat Patra

This newly introduced scheme focuses on empowering women by offering high interest rates on deposits with a two-year lock-in period. It’s ideal for women aiming to grow their savings securely.

Eligibility: Exclusively for women
Tenure: 2 years
Interest Rate: Competitive and fixed
Tax Benefits: Applicable under Section 80C

Features and Benefits of the Best Savings Schemes in India

Overwhelmed with the above details? The following summary table can help you compare and understand each policy with a glance:

Scheme Plan	Eligibility	Minimum investment	Maximum investment	Interest Rate	Tax Deduction
Tax Saving Fixed Deposits	Indian residents, HUFs	₹100	No limit	6.5-7.5%	Up to ₹1.5 lakh under Section 80C of the Income Tax Act
Unit Linked Insurance Plans	Indian residents	₹1,000/month or ₹12,000/year	No limit	Market-linked	Premiums up to ₹1.5 lakh under Section 80C; proceeds exempt under Section 10(10D) (conditions apply)
Equity Linked Savings Scheme	Indian residents	₹500	No limit	Market-linked	Up to ₹1.5 lakh under Section 80C
Sukanya Samriddhi Yojana	Parents/guardians of a girl child	₹250	₹1.5 lakh/year	8.2%	Up to ₹1.5 lakh under Section 80
National Pension Scheme	Indian citizens aged 18-70 years	₹500/year	No limit	9-12%	Up to ₹2 lakh (₹1.5 lakh under Section 80C + ₹50,000 under Section 80CCD(1B))
Senior Citizen Savings Scheme	Indian residents aged 60+	₹1,000	₹30 lakh	8.2%	Up to ₹1.5 lakh under Section 80C
Public Provident Fund	Indian residents	₹500/year	₹1.5 lakh/year	7.1%	Up to ₹1.5 lakh under Section 80C
National Saving Certificate	Indian residents	₹1,000	No limit	7.7%	Up to ₹1.5 lakh under Section 80C
Post Office Saving Scheme	Indian residents	₹500	₹1 crore (single account)	4%	No tax deduction
Post Office Time Deposit	Indian residents	₹1,000	No limit	8.4-8.5%	5-year deposits eligible for deduction under Section
Post Office Monthly Income Scheme	Indian residents	₹1,000	₹9 lakh (joint account)	7.4%	No tax deduction
Post Office Recurring Deposit	Indian residents	₹100/month	No limit	8.4%	No tax deduction
Employees’ Provident Fund	Salaried employees in India	12% of basic salary	No limit	8.25%	Employer + employee contributions are deductible under Section 80C
Kisan Vikas Patra	Indian residents	₹1,000	No limit	7.5%	No tax deduction
Mahila Samman Bachat Patra	Indian residents	₹50	No limit	7.5%	No tax deduction

ortance of Saving Schemes in India

The above savings scheme can help you earn returns on your surplus funds and ensure their safety. Further, you can enjoy the following benefits:

Achieving Long-Term Financial Goals:

Most saving schemes offer attractive interest rates and substantial maturity proceeds. You can use these earnings to achieve big financial milestones like buying a house, funding your child’s education, or planning a wedding.

Ensuring Financial Security:

The funds you set aside for these schemes can serve as a financial cushion during emergencies. If any unexpected requirement arises, you would not have to resort to borrowing money and hampering your peace of mind.

Managing Personal Finances:

Saving schemes help you stay disciplined as they require periodic contributions. Along with consistent savings, you can also accurately track your periodic contributions and earnings. You can thus manage your finances more effectively.

Maximizing Tax Benefits:

Many saving schemes, like PPF or ELSS, come with tax benefits under Section 80C of the Income Tax Act. Thus, you not only earn direct returns but also save money while paying taxes.

Planning for Retirement:

Many people feel anxious about their post-retirement years as they will not have a regular income stream. Investing in schemes like NPS, Pradhan Mantri Vaya Vandhana Yojana, or Senior Citizens Savings Scheme can resolve such worries. They ensure that you have a steady income and financial independence during your golden years.

Pradhan Mantri Vaya Vandhana Yojana,

Savings Scheme	Interest Rate
Tax Saving Fixed Deposits	6.5-7.5% (varies as per bank)
Unit Linked Insurance Plan (ULIP)	13-28% (varies as per market conditions)
Equity Linked Savings Scheme (ELSS)	10-12% (varies as per the equity market conditions)
Sukanya Samridhi Yojana (SSY)	8.2%
National Pension Scheme (NSC)	9-12%
Senior Citizen Saving Scheme (SCSS)	8.2%
Public Provident Fund	7.1%
National Saving Certificate (NSC)	7.7%
Post Office Savings Account	4%
Post Office Time Deposit	8.4-8.5%
Post Office Monthly Income Scheme (POMIS)	7.4%
Post Office Recurring Deposits	8.4%
Employees Provident Fund (EPF)	8.25%
Kisan Vikas Patra	7.5%
Mahila Samman Bachat Patra	7.5%

Difference between Saving Schemes, Investment Plans and Saving Plans

Saving schemes, investment plans, and saving plans are all financial tools designed to help you manage your money. Though they are commonly used interchangeably, they differ in purpose, risk, and returns.

Aspect	Saving Schemes	Investment Plans	Saving Plans
Objective	Build a secure and steady savings pool with minimal risk	Wealth creation through market-linked instruments	Build a disciplined habit of saving for specific financial goals
Risk Level	Low, as most saving schemes are government-backed	Medium to high, depending on the market instruments chosen	Low to moderate, depending on the plan’s structure
Returns	As risk levels are low, moderate returns are offered. Moreover, returns are fixed and revised periodically	High returns are offered, but they are variable based on market performance	Returns may be fixed or market-linked, depending on the chosen saving plan
Examples	PPF, NSC, SSY	ULIPs, mutual funds, stocks	Bank recurring deposits, life insurance savings plans (endowment policy)
Tax Benefits	Eligible for tax deductions under Section 80C in many cases	Tax benefits under Section 80C for specific plans like ELSS and ULIPs	May or may not offer tax benefits, depending on the plan type
Suitable For	Individuals seeking financial security with guaranteed returns	Investors aiming for wealth accumulation and higher returns	People looking for disciplined and goal-oriented savings

How to Choose the Best Savings Scheme for Investment?

The variety of saving schemes available in the market surely offers individuals the freedom of choice. But at the same time, this might create confusion about the best saving scheme in India to select. A systematic approach can help in this regard:

Identify Your Financial Objectives

Start by defining what you want to achieve with your savings. Are you saving for a child’s education, a dream vacation, or building a retirement fund? Clear financial objectives will guide you to the right scheme.

Choose the Saving Schemes that Match Your Financial Goals\

Select money saving schemes that align with your goals. For short-term needs, consider low-risk options like fixed deposits. For long-term goals, explore high-return investments like mutual funds or PPFs.

Assess the Risk and Return Potential

Every savings scheme comes with its own risk and return profile. Understand how much risk you can take and choose a scheme that offers the best balance for your comfort level and expected returns.

Aim for Maximum Growth

Look for schemes that maximize your savings with compounding benefits. Options like ELSS or ULIPs can grow your money significantly over time if you stay invested.

Consider Tax Implications

Some schemes offer tax-saving benefits, while others might add to your taxable income. Choose plans like PPF or National Savings Certificates if tax savings are a priority.

Conclusion

Planning your savings is about more than just picking the right scheme. It is about creating a holistic financial strategy that evolves with you over time. As you start your savings journey, focus on staying informed about new options, regularly reviewing your investments, and adjusting your approach to fit your changing needs. Life evolves, and so should your financial plan.

If you are unsure where to start or how to optimize your savings, consider talking to a financial advisor. Ultimately, the most successful savings strategy is one that combines discipline, consistent investment, and a clear vision of your financial future. By taking small, intentional steps now, you can build a strong financial foundation that ensures security, growth, and peace of mind for years to come.

FAQs on Saving Schemes

Which scheme is best for savings?

The best savings scheme depends on your financial goals and risk appetite. For safe and tax-efficient savings, options like the Public Provident Fund (PPF) or Sukanya Samriddhi Yojana (SSY) are excellent. Similarly, the Equity Linked Savings Scheme (ELSS) provides higher returns for those comfortable with market-linked investments

Which Government scheme offers the highest interest rate?

Currently, the Sukanya Samriddhi Yojana (SSY) offers one of the highest interest rates among government-backed savings schemes, i.e., around 8%. However, rates are subject to periodic revisions by the government

Which savings scheme gives more return?

For higher returns, the Equity Linked Savings Scheme (ELSS) stands out due to its exposure to equity markets. While it involves market risk, it has the potential for superior long-term growth compared to fixed-income schemes like PPF or National Savings Certificates (NSC).

Can students invest in post office savings schemes?

Yes, students can invest in Post Office Saving Schemes if they meet the age or guardianship requirements. For instance, a guardian can open a savings account or recurring deposit on behalf of a minor, making it a great option to instill financial discipline.