Saving schemesare financial investment opportunities that can be offered by financial institutions in the public sector, government, or banks. Based on the provider, the policies will vary greatly in terms of investment horizons, interest rates, and tax benefits.
These schemes are ideal to prepare for any unforeseen calamities of the future. Saving schemes allow you to meet all your personal aspirations such as starting a business, supporting your child’s further education or marriage, and so on.
A lot of people also consider it as an additional source of income, which is backed by the government, thereby providing all-around security and safety to your capital. On top of that, they carry the least risk as compared to other investment plans and offer good returns as well.
The interest rates for saving schemes are revised periodically that also provides you the chances of gaining higher returns. The saving schemes available in India can be categorized into two major types namely National Savings Certificate (NSCS) and National Savings Schemes (NSS).
Let us take a detailed overview of each of these types of savings schemes:
- National Savings Certificate
Offered by the Government of India, the National Savings Certificate is a scheme designed for fixed income investment that can be opted through your nearest post office. It features a savings bond that also acts as a great tax-saving tool for you.
If you are a person with a low-risk appetite, this scheme is certainly a perfect match for you. It greatly resonates with other savings schemes like public provident fund and other post office fixed deposits.
However, as it involves a lower risk, the returns are also fairly lower for this investment scheme. The scheme can be bought for individuals, couples, and minors. You need to be a permanent resident of India to be able to invest in this plan.
If you are among Hindu Undivided Families or Non-Resident Indians, you will not be eligible to invest in this savings scheme. Here’s a quick list of features offered by this investment plan along with the benefits that it provides:
- They are available in two different options of maturity period viz 5 years and 10 years
- These schemes do not have any upper limit of purchase, but you can only enjoy tax benefits of up to Rs. 1.5 Lakhs as per the section 80C of the Income Tax Act
- At present, the rate of interest for this scheme is 6.8% that adds up to your investment, and compounded annually to act as a regular source of income
- The investment can be as small as Rs. 100 and the amount can also be increased later as per your convenience
- This policy is also accepted at banks as collateral while taking loans
- In the event of your unfortunate demise, this savings plan also act as a form of financial security for your family
- When the tenure of these plans complete, the entire value will be paid to you as the returns are totally free from taxes
While investing in this savings scheme, you need to keep in mind that you will not be able to withdraw your funds partially except in the event of your sudden death or a legal order from the court.
- National Saving Schemes
The National Savings Schemes are also backed by the government of India that provides a lump-sum amount of money after the completion of the policy tenure. The rate of interest applicable for this scheme is compounded annually and applied to your investments.
It offers you great flexibility in terms of customization that allows you to orient the scheme as per your future objectives. The scheme is also eligible for tax deduction and benefits under section 80C of the Income Tax Act.
Here’s a list of features associated with this savings plan in India:
- The plan offers fixed returns after the completion of the maturity term, but the investments are not linked to the market like other schemes issued by the government
- The interest rate for this scheme is revised and changed every quarterly. This increases your chances of gaining a higher rate of interest on your investments
- The schemes that fall under this category are also eligible for tax deduction and benefits under the section 80C of the Income Tax Act of India
These savings schemes also prevent you from withdrawing your funds prematurely except for rare cases like the death of the policyholder or any legal order from the court. Therefore, make sure you keep this in mind before investing.
Canara HSBC Oriental Bank of Commerce – Guaranteed Savings Plan: A Bliss for Your Child’s Future
The Guaranteed savings plan offered by Canara HSBC Oriental Bank of Commerce Life Insurance is one of the best saving-investment policies available in India. It offers a good return on your investments at a very nominal price and assures guaranteed benefits on the maturity of your plan.
If you commit to a higher premium payment, the plan offers you an even better value in terms of returns. Additionally, it also allows you to choose from multiple premium payment terms that make it a very convenient option for you. Here’s how can It help you brighten your child’s future:
- It allows you to save funds for the further studies of your child
- It enables you to accumulate wealth for your children’s marriage
- It safeguards your children by offering them monetary support in the event of your death
The plan also features an additional life cover for the entire policy term. This means in addition to the investment benefits of this plan; you’ll also be able to enjoy a life cover that keeps your family secure in case of any unprecedented events.
Conclusion
If you want to plan for a financially secure future, you must start investing at the right time. With the help of investment plans, you can sufficiently generate an ample amount of funds to support your children’s future and help them achieve their dreams.
