Of the several small saving schemes backed by the government, with limited funds you cannot book profits by investing in all of them. Here's a take on which can best meet your investment goals and considering that interest on these schemes is expected to remain constant regardless of the bond yield based on the rates of which the rate on small small savings is determined. It is yet a good time to park your money in these schemes as you are unlikely to get the stupendous returns currently on offer.
But as with other investment bets, you cannot afford to overlook your investment horizon, payment capacity towards the investment and also the associated goal and your risk appetite.
So, of these schemes you need to factor in the various pros and cons and then decide on the scheme for yourself.
Sukanya Samriddhi Scheme
If you have a girl baby aged less than 10 years and wish to accumulate some sizable corpus for meeting their high-ticket expenses such as higher education and marriage, you can definitely opt for the scheme. With a higher interest rate of 8.3% in comparison to PPF on the scheme with funds diverted in debt funds it is a good bet with safe proceeds. But experts suggest to park funds in the scheme with a combination of funds in equity oriented funds as they reap higher return. V
It is a best investment asset for salaried individual who can accumulate over and above their EPF savings for a good fund amount for sunset years. With a tenure of 15 years and a tax free return of 7.8%, the after tax returns are way better with other similar yielding instruments such as bank FDs. Also other self-employed individuals should also park their funds in the PPF to reap a good corpus in debt instruments.
It is to be noted that with 7.8% interest rate and tax on interest earned, the returns from 5-year NSC is at par with FDs but the only advantage here is that deductions can be claimed on the interest earned on it every year. Also, as rates across bank deposits have fallen, you surely can book a better deal with NSC.
Senior Citizens Savings Schemes or SCSS
If you are a senior citizen aged 60 years or taken a VRS and aged 58 years, you can get regular payouts from the scheme with a maximum overall cap of Rs. 15 lakhs in the scheme. Defence personnels are allowed to park funds in the scheme with no age criteria and can lock in a higher return of 8.3% p.a.