What are the Benefits of Saving Schemes And How to Choose The Best One?

Benefits of Saving Schemes in India

Steps to Choose the Best Saving Scheme

FAQs about Benefits of Saving Schemes

What is the duration of fixed deposit schemes?

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The duration of fixed deposits usually ranges from seven days to ten years. You can select any tenure within this time period as per your convenience.

Do you have to pay taxes on your returns from savings schemes?

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For some schemes, you will have to pay a certain percentage of tax to the government. These include schemes like Fixed Deposits, Equity-Linked Savings Scheme, Kisan Vikas Patra, Post Office Monthly Income Scheme, and so on. However, for some schemes, the returns are not taxable. These include schemes like Public Provident Fund, Atal Pension Yojana, Sukanya Samruddhi Yojana, and so on.

Which savings schemes give the best returns?

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The savings schemes which offer the best returns are Unit Linked Insurance Plan, Public Provident Fund, Fixed Deposits, National Pension Scheme, Senior Citizen Savings Scheme, and so on.

I have limited money to invest. Should I buy term insurance or an endowment plan?

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If you’re tight on budget, start with a term insurance plan because the premium is usually affordable and the coverage is high. Once you have secured your family’s future, start putting extra money into savings schemes. An endowment plan is a combination of insurance and savings, but the returns are usually lower compared to dedicated savings plans.

How can I choose the best savings scheme if I already have mutual funds?

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To choose the best savings scheme alongside mutual funds, prioritise a life insurance policy for its affordable premiums and high coverage, ensuring your family is financially secure in case of unforeseen events.

You can also look for options with tax benefits, low fees, and guaranteed returns. Diversifying with a mix of fixed deposits, PPF, or NSC can provide stability.

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