Are you looking for some safe and profitable investment schemes in India? Do you want to know how to invest in government schemes and plans 2023 with high returns? If yes, then you have come to the right place. In this blog post, we will tell you about the top 10 government investment schemes that offer high returns, low risk, and tax benefits. These schemes are suitable for different types of investors, such as salaried employees, senior citizens, women, and students. We will also provide you with some tips on how to choose the best investment scheme for your needs and goals.
What are Government Investment Schemes?
Government investment schemes are financial products that are launched and backed by the government of India. They are designed to provide various benefits to the investors, such as:
- High returns: Government investment schemes offer higher interest rates than other traditional investment options, such as bank deposits, mutual funds, and bonds.
- Low risk: Government investment schemes are guaranteed by the government, which means that there is no risk of default or loss of principal amount.
- Tax benefits: Government investment schemes are eligible for tax deductions under various sections of the Income Tax Act, such as Section 80C, Section 80D, Section 80TTA, etc.
- Social welfare: Government investment schemes also aim to promote social welfare and economic development by providing financial assistance to various segments of society, such as farmers, women, senior citizens, students, etc.
Here are the top 10 government investment schemes that you can consider investing in 2023:
- Public Provident Fund (PPF): PPF is one of the most popular and long-term investment schemes in India. It allows you to save money for your retirement while earning a high interest rate. The current interest rate for PPF is 7.1% per annum. You can invest up to Rs. 1.5 lakh per year in PPF and claim tax deduction under Section 80C. The maturity period of PPF is 15 years, which can be extended for another 5 years. You can also avail loan and partial withdrawal facilities from your PPF account after completing certain conditions.
- National Pension System (NPS): NPS is a voluntary pension scheme that allows you to build a retirement corpus by investing in various asset classes, such as equity, debt, and government securities. The returns on NPS depend on the performance of the underlying assets and the fund manager. You can choose between two types of accounts: Tier I and Tier II. Tier I account is mandatory and offers tax benefits under Section 80C and Section 80CCD(1B). Tier II account is optional and does not offer any tax benefits. You can invest up to Rs. 2 lakh per year in NPS and claim tax deduction under Section 80C and Section 80CCD(1B). The maturity period of NPS is 60 years, after which you can withdraw up to 60% of your corpus tax-free and buy an annuity with the remaining amount.
- Sukanya Samriddhi Yojana (SSY): SSY is a special savings scheme for girl children. It aims to encourage parents to save money for their daughter’s education and marriage. The current interest rate for SSY is 7.6% per annum. You can open an SSY account for your daughter before she turns 10 years old and deposit a minimum of Rs. 250 and a maximum of Rs. 1.5 lakh per year until she turns 15 years old. You can claim tax deduction under Section 80C for your deposits. The maturity period of SSY is 21 years or until the girl gets married, whichever is earlier. You can also avail partial withdrawal facility from your SSY account after your daughter turns 18 years old or passes the 10th standard exam.
- Senior Citizens Savings Scheme (SCSS): SCSS is a dedicated savings scheme for senior citizens aged 60 years or above. It offers a high interest rate of 7.4% per annum, which is payable quarterly. You can invest up to Rs. 15 lakh in SCSS and claim tax deduction under Section 80C. The maturity period of SCSS is 5 years, which can be extended for another 3 years. You can also avail premature withdrawal facility from your SCSS account after completing one year, subject to certain penalties.
- Pradhan Mantri Vaya Vandana Yojana (PMVVY): PMVVY is a pension scheme for senior citizens aged 60 years or above. It provides a guaranteed income of 7.4% per annum, which is payable monthly, quarterly, half-yearly, or yearly. You can invest up to Rs. 15 lakh in PMVVY and receive a maximum pension of Rs. 9,250 per month. The maturity period of PMVVY is 10 years, after which you can withdraw your principal amount along with the final installment of pension. You can also avail loan facility up to 75% of your purchase price after completing three years.
- Kisan Vikas Patra (KVP): KVP is a savings certificate scheme that doubles your money in a fixed period of time. The current interest rate for KVP is 6.9% per annum, which implies that your money will double in 124 months or 10 years and 4 months. You can invest a minimum of Rs. 1,000 and a maximum of Rs. 10 lakh in KVP and claim tax deduction under Section 80C. The maturity period of KVP is 124 months, but you can encash your certificate after completing two and a half years, subject to certain penalties.
- National Savings Certificate (NSC): NSC is another savings certificate scheme that offers a high interest rate of 6.8% per annum, which is compounded annually. You can invest a minimum of Rs. 100 and a maximum of Rs. 1.5 lakh in NSC and claim tax deduction under Section 80C. The maturity period of NSC is 5 years, after which you can withdraw your principal amount along with the accrued interest. You can also use your NSC as collateral to avail loans from banks and other financial institutions.
- Post Office Monthly Income Scheme (POMIS): POMIS is a post office savings scheme that provides a fixed monthly income at an interest rate of 6.6% per annum. You can invest up to Rs. 4.5 lakh individually or up to Rs. 9 lakh jointly in POMIS and receive a monthly income of up to Rs. 2,475 or up to Rs. 4,950, respectively. The maturity period of POMIS is 5 years, after which you can withdraw your principal amount along with a bonus of 5% of your deposit amount. You can also avail premature withdrawal facility from your POMIS account after completing one year, subject to certain penalties.
- Pradhan Mantri Jan Dhan Yojana (PMJDY): PMJDY is a financial inclusion scheme that aims to provide every household with a bank account, a debit card, and an insurance cover. You can open a PMJDY account with zero balance and enjoy various benefits, such as:
- An overdraft facility of up to Rs. 10,000
- An accidental insurance cover of up to Rs. 2 lakh
- A life insurance cover of up to Rs. 30,000
- Direct benefit transfer of various government subsidies and schemes
- Access to other financial products and services
- Atal Pension Yojana (APY): APY is a pension scheme for unorganized sector workers aged between 18 years and 40 years. It provides a fixed monthly pension of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, or Rs. 5,000, depending on your contribution amount and age at entry. You can contribute as low as Rs. 42 per month or as high as Rs. 210 per month in APY and claim tax deduction under Section 80CCD(1). The pension will start after you attain the age of 60 years, and will continue till your death or the death of your spouse, whichever is later.
How to Choose the Best Government Investment Scheme for Your Needs and Goals?
Before investing in any government investment scheme, you should consider the following factors:
- Your risk appetite: If you are risk-averse and want guaranteed returns, you should opt for schemes that are backed by the government, such as PPF, SCSS, PMVVY, etc.
- Your investment horizon: If you have a long-term investment horizon and want to save for your retirement or other goals, you should opt for schemes that have a longer maturity period and offer compounding benefits, such as NPS, SSY, KVP, etc.
- Your tax liability: If you want to save tax on your income, you should opt for schemes that offer tax benefits under various sections of the Income Tax Act, such as PPF, NPS,
