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In the world's largest democracy, financial security and wealth-building are aspirations that resonate with people from all walks of life. From busy cities like Mumbai to the peaceful greenery of Kerala, every Indian wants to ensure they have enough money for their present and future.
Moreover, as India's economy keeps changing and offering new opportunities, more ways have presented themselves for people to grow their money. However, this plethora of options can make it difficult to decide and settle on the right one. By familiarising yourself with good avenues for savings, understanding their pros and cons, you can make the best decision for your money.
This blog will take you through the top 10 best money saving plans in India preferred by investors.
Best Savings Plans in India 2023
There are several money-saving plans in India, each tailored to specific financial goals and risk appetites. Some of the best money saving plans include:
1. Fixed Deposits
Fixed deposits, commonly called FDs, are a widely favoured best savings method in India. Fixed Deposits entail depositing a lump sum of money with a bank for a fixed length of time, which might range from a few months to several years. It is the most effective approach to save money while earning interest. In exchange, you will get a set interest rate on your deposit.
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2. Recurring Deposits
A recurring deposit is one of the best investment plans that is offered by banks and financial institutions. Under this scheme, you need to regularly deposit a fixed amount of money into their account monthly. Over time, these deposits earn interest, providing a convenient and disciplined way for people to save and grow their funds.
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3. Senior Citizen Savings Scheme
The Senior Citizen Savings Scheme (SCSS) is a financial savings scheme specifically designed for senior citizens in India. The scheme was introduced by the Indian Government in the year 2004 to have a comfortable retirement for people who are aged more than 60 years old.
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4. Mutual Funds
Mutual Funds are investment instruments where the fund manager collects money from other investors to buy a diversified portfolio of stocks, bonds, or other securities. They offer a professionally managed, cost-effective way to access various assets and earn returns.
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6. National Savings Certificate - (NSC)
The National Savings Certificate (NSC) is like a savings plan introduced by the government. Under this investment plan, you need to deposit a fixed amount against the bond. You can invest in the scheme at a post office. The scheme is safe and ideal if you want to save money while reducing taxes.
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7. Pradhan Mantri Vaya Vandana Yojana - PMVVY
Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme in India primarily designed for senior citizens aged 60 and above. This scheme provides a regular pension income through periodic payouts, ensuring financial security during retirement. PMVVY offers fixed interest rates and is available for ten years.
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8. Sukanya Samridhi Yojana Account (SSA)
Sukanya Samriddhi Yojana Account (SSA) is a government savings scheme in India specifically crafted to promote the financial well-being of girl children. Parents or guardians can open an SSA account in the name of a girl child below 10, benefiting from attractive interest rates and tax advantages.
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9. Employees Provident Fund (EPF)
Employees Provident Fund (EPF) is an Indian-mandated savings system in which employers and workers pay a percentage of their income to construct a retirement fund, assuring financial stability after retirement. This savings option is an integral part of the country's social security system.
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10. Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (MIS) is a trusted financial instrument offered by the Indian postal system. MIS is a straightforward online savings option that provides individuals with a regular and secure income stream.
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Also Read- Benefits of Savings Account - Why Is It Important To Have A Savings Account
Key Points to Consider Before Investing in Savings Plans
When investing in savings plans, it is important to choose wisely, as the wrong investment can significantly impact your long-term objectives. Hence, you must consider the following factors:
1. Your Financial Goals
Consider what you are saving for before saving. Is it a new car, a house, or your retirement? Knowing your goals will help you choose the right savings plan.
2. Risk Tolerance
Different savings plans come with different levels of risk. Some are safe but may offer lower returns, while others carry more risk but can earn you more. Decide how much risk you can take.
3. Lock-in Period
Some savings plans have a lock-in period during which you cannot access your funds. If you make a withdrawal, you will have to pay a penalty. Thus, understanding the lock-in period is crucial, especially if you need the funds within a short duration.
4. Costs and Fees
Savings plans often incur fees that can affect your returns. Understanding these costs upfront is crucial, so you only lose what you gain.
When choosing the best saving plans in India to grow your money, there is no one-size-fits-all solution, and this is why you should choose your plan keeping in line with your needs. Additionally, by making informed choices and staying committed to your financial goals, you can take meaningful steps toward securing your financial future in India.
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