Common man earns money or income for his work. Each and every person tries to save some amount of money earned for any kind of emergencies, this money saved from his income is his savings. Savings, in earlier times was in the form of gold or cash kept in lockers at home. But as times changed the cash saved from income went to savings account in banks and gold went to lockers of these banks.
Government also introduced various schemes under small savings for common man in which one can invest his savings and earn interest on that investment. These savings are:
- National Savings Certificate (NSC) and Savings Scheme (NSS): These types of savings have attractive interest rates of 8.8% and 9% respectively. The tenure of NSC is 5years and for NSS is 4years. There is no maximum limit of investments. The minimum investment is Rs100. The NSC can be transferred to another person once in their lifetime. The interest accumulated is reinvested and interest compounded half yearly and the certificates can be kept as collateral for loan. NSS interests are compounded annually and the certificates cannot be used as collateral.
Simple savings still stable
- Public Provident Fund (PPF): This type of saving has interest of 8.70%pa which is compounded annually. PPF cannot be joint account. One cannot close account before maturity. Minimum investment Rs 500 to maximum 1,50,000. Maturity period is 15years and can be extended up to 5years. 12 deposits can be made in a year. Even lumpsum deposits can also be done. This account saves tax and the accumulated interests is also tax free.
- Post Office Savings Scheme: Post Office savings has always been an important part of everyone’s lives. It has always been customer friendly and approachable for common man in terms of higher returns. It has inculcated the habit of savings in Indian public.
- Senior Citizen Savings Scheme: With interest rate of 9.3% pa this saving scheme is only for senior citizen that is retired or VRS opted people. The tenure period is 5years. Maximum of 15lakhs can be deposited in this scheme and the denominations should be of Rs 1000. If the accumulated interest is more than 10000pa then TDS can be deducted at the source. This scheme also saves tax under section 80C.
- Kisan Vikas Patra: This saving scheme was one of the popular schemes of postal department but it got discontinued in 2011 due to misuse. But it was again introduced in the year 2014. It is available in denominations of Rs 1000, Rs 5000, Rs 10000 and Rs 50000. The minimum purchase value is Rs1000. It is available in all the post offices all over India. It can be encashed prematurely after 2 and half years.
- Sukanya Samriddhi Account: This scheme was introduced by our very own honourable Prime Minister Narendra Modi for the benefit of girl child in our country. This scheme provides financial assistance for girl child’s lifelong aspirations. It has an attractive interest rate at 9.2 %. Minimum deposit is Rs1000 and maximum is 150000 in a year.
- Atal Pension Yojana: This scheme is targeted towards the weaker section of the society who can avail the benefit of government welfare schemes. The main aim of this scheme is to provide pension to people who are working in unorganised sector. This scheme can be availed by the citizens of India of the age group between 18-40 years. The minimum duration of paying premium is 20years. This scheme can be availed by the person only if he has not applied in any other social security schemes. The person availing this benefit should have an active savings account. Pension amount depends on the number of premiums paid. The higher the number of premiums paid higher will be the pension. Like this scheme there are other pension schemes provided by the government such as
- Employee Provident Fund: It’s a compulsory contribution done by Indian workers which will be retirement fund for the employees or workers. This amount contributed by the workers can be used as emergency fund also by them. 12% of the salary is contributed by the employees on monthly basis. The interest on this amount is decided by the government. Usually it is in the range of 8-12%. The interest is credited to the employee’s EPF account on 1st April every year.