Government investment schemes for better future

If an investor wants their money to increase over a certain period of time with minimal risk involved, government schemes are the right choice. Not just for low risk-taking investors, government-backed schemes are ideal for investors planning to diversify their portfolios along with availing some tax benefits.

Atal Pension Yojana (APY)

A pension plan especially designed for the unorganized sector of the Indian society, Atal Pension Yojana is launched with the objective of providing financial corpus to the underprivileged senior citizens. Brought up in the year 2015, APY is completely regulated by the PFRDA (Pension Fund Regulatory and Development Authority).

The primary objective of the scheme is to focus on the unorganized sectors of the society like gardeners, helpers, workers, etc. so that they can take care of their basic daily expenses and have a sufficed future.

Eligibility Conditions and Other Restrictions -

♦ The age of the employer should range between 18 to 40 years

♦ 1 employer can have only 1 APY account

♦ An existing savings account is mandatory both in bank or post office

♦ Contributions can be made on a monthly, quarterly, and semi-annually basis

♦ Tax benefits can be availed under Section 80CCD of the Income Tax Act, 1961

♦ Contributions to be made for 20 years (Minimum)

♦ Aadhar card needs to be linked with the bank account

♦ The minimum contribution of Rs 42 to be made at the age of 18 to receive Rs 1,000 as pension

♦ Maximum contribution of Rs 1,454 to be made at the age of 40 to receive Rs 5,000 as pension

Kisan Vikas Patra (KVP)

Available only at the Indian post offices, Kisan Vikas Patra (KVP) is an excellent one-time investment scheme that doubles the investors' money in just 124 months (that is 10 years 4 months approximately). Launched in the year 1988, and revamped in 2014 to prevent money laundering possibilities, Kisan Vikas Patra Scheme can be bought with a minimum amount of Rs 1,000. Kisan Vikas Patra is a low-risk long-term savings scheme that guarantees safe returns as it is completely government-backed.

Eligibility Conditions and Other Restrictions -

♦ The age of the scheme holder should be minimum of 18 years

♦ Can be bought even without any bank account

♦ The KVP scheme can be bought by

♦ An individual

♦ On behalf of a minor

♦ Jointly by 2 adults

♦ A trust

♦ Contribution to be made only one time

♦ The present rate of interest is 6.9 per cent per annum

♦ Aadhar card is compulsory for investing in the KVP scheme

♦ PAN Card is mandatory for investments above Rs. 50,000

♦ For deposits above Rs. 10 lakhs, salary slips, bank documents, ITR, etc. are required of the investor

♦ It is a long-term investment scheme with guaranteed returns

♦ Returns are completely taxable under the scheme

♦ Premature withdrawals are not allowed unless the scheme holder passes away or under court orders

National Pension Scheme (NPS)

Launched by the Government of India keeping in mind the senior citizens of the country, the National Pension Scheme (NPS) is completely administered and regulated by the PFRDA (Pension Fund Regulatory and Development Authority).

Available to all Indians including NRIs (Non-Resident Indians) between the age of 18 to 60, NPS also offers a tax exemption of Rs. 1,50,000 under Section 80CCD of the Income Tax Act, 1961.

Eligibility Conditions and Other Restrictions

♦ The age of the scheme holder should range between 18 to 60 years

♦ Any Indian resident, as well as NRIs, can avail of the benefits of the scheme

♦ A unique PRAN (Permanent Retirement Account Number) is required for investment under Tier-I and Tier-II accounts

♦ NPS offers flexibility in asset allocation choices (Auto choice and Active choice) to the holders

♦ A ceiling of Rs. 1.5 lakh can be exempted from taxation under this scheme

♦ Contributions made towards the scheme are also flexible

♦ The scheme holder should be KYC compliant

♦ NPS account is mandatory to carry on the transactions

National Savings Certificate (NSC)

National Savings Certificate is a complete government-backed scheme launched keeping in mind the lower and middle sections of the society. The scheme can be bought from the nearest post office with a minimum contribution of Rs. 1,000. The current interest rate for National Savings Certificate (NSC) is 6.8 per cent per annum and the maturity period is of 5 years or 10 years.

Eligibility Conditions and Other Restrictions-

♦ There is no age limit for the scheme holder

♦ The scheme holder should be an Indian citizen

♦ The minimum contribution made towards the scheme is Rs. 100 and maximum has no limit

♦ Minor can be added as a nominee by the scheme holder

♦ Tax benefit up to Rs. 1.5 lakhs can be availed under Section 80C of the Income Tax Act, 1961

♦ The current rate of interest is 6.8 per cent which is revised quarterly

♦ Premature withdrawals are not allowed in general conditions

Public Provident Fund (PPF)

One of the most popular investment schemes, the Public Provident Fund (PPF) is famous for its flexible nature. A famous savings plus investment plan, PPF was launched with the aim to promote small investments by providing reasonable returns. Currently, the interest rate of PPF is 7.1 per cent and it offers a tax exemption of up to Rs. 1.5 lakhs per annum.

Eligibility Conditions and Other Restrictions

♦ Public Provident Fund account can be opened by any Indian resident above the age of 18

♦ The account can be opened on behalf of minor as well

♦ PPF account can be operational online as well

♦ The current rate of interest is 7.1 per cent

♦ Premature withdrawals can be made but with some regulations

♦ Aadhar card needs to be linked with the bank account to open a PPF account

♦ It comes with a lock-in period of 15 years

♦ Partial withdrawals can be made starting from the 7th year

Senior Citizens Savings Scheme (SCSS)

Senior Citizen Savings Scheme is a retirement benefit program that is completely government-backed. Specially designed to safeguard the retirement future of Indian citizens, the scheme is for 60 years and above people. Senior Citizens Saving Schemes have a tenure of 5 years and can also be extended up to 3 years.

Eligibility Conditions and Other Restrictions

♦ Indian citizens at the age of 60 years can avail the scheme benefits

♦ NRIs are not eligible the buy this scheme

♦ The current interest rate of the SCSS is 7.4 per cent per annum

♦ The account can be opened at any bank or post office

♦ Premature withdrawals are allowed with some restrictions

♦ Only a one-time investment is allowed per account

♦ Maximum of Rs. 15,00,000 can be deposited under the scheme

♦ The account can be transferred from post office to bank or visa versa as per convenience

♦ Tax benefit of up to Rs. 1.5 lakhs can be availed under Section 80C of the Income Tax Act, 1961.