Saving Schemes in India – 2025

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What is Saving Schemes?

Saving schemes in India are government-backed financial plans designed to encourage citizens to save and earn returns at attractive interest rates. Options like the Public Provident Fund (PPF), National Savings Certificate (NSC), and Senior Citizens Savings Scheme (SCSS) offer tax deductions and benefits under the Income Tax Act, 1961. These schemes cater to various financial goals, such as retirement, education, and emergency funds, and are considered safe due to government backing.Check FREE Credit Score

Here are more details about the various savings scheme options available in India.

List of Saving Schemes In India 2025

The following table highlights the details of savings schemes:

Savings Scheme	Interest Rate	Contribution Amount	Duration	Tax Deduction on Principal	Interest Taxable	Taxability of Returns
Post Office Savings Account	4.0%	Minimum: Rs.500Maximum: No Limit	No limit	No	Yes	Interest up to Rs.10,000 in a financial year is exempt
Post Office Monthly Income Scheme	7.4%	Minimum: Rs.1,000Maximum: Rs.9 lakh	5 years	No	Yes	Taxed as per income tax slab rates
Post Office Recurring Deposit	6.7%	Minimum: Rs.100Maximum: No limit	5 years	No	Yes	TDS of 10% if interest exceeds Rs. 40,000 (Rs. 50,000 for senior citizens)
Post Office Time Deposit (One Year)	6.9%	Minimum: Rs.1000Maximum: No limit	1 year	No	Yes	Interest added to total annual income and taxed as per income tax slab rates
Post Office Time Deposit (Two Year)	7.0%	Minimum: Rs.1000Maximum: No limit	2 years	No	Yes	Interest added to total annual income and taxed as per income tax slab rates
Post Office Time Deposit (Five Year)	7.5%	Minimum: Rs.1000Maximum: No limit	5 years	Yes	Yes	Tax benefits under Section 80C
Kisan Vikas Patra (KVP)	7.5%	Minimum: Rs.1000Maximum: No limit	9 years & 5 months	No	Yes	Returns are taxable
Public Provident Fund (PPF)	7.1%	Minimum: Rs.500Maximum: Rs.1.5 lakh p.a.	15 years	Yes	No	Exempt from tax
Sukanya Samriddhi Yojana	8.2%	Minimum: Rs.250Maximum: Rs.1.5 lakh p.a.	15 years contribution periodMaturity period at 18 or 21 years of girl child	Yes	No	Interest is exempt from tax
National Savings Certificate	7.7%	Minimum: Rs.1,000Maximum: No Limit	5 years	Yes	No	Up to Rs.1.5 lakh under Section 80C
National Pension Scheme	Market Linked	Govt employees: 14%Others: 10%	Up to 60 years of age but can be extended up to 70	Yes	Yes	Up to Rs.1.5 lakh tax deduction for employee & employer’s contributionAdditional deduction of up to Rs.50,000 for self-contribution
National Savings Certificate	Market Linked	Minimum: Rs.1,000Maximum: No Limit	5 years	Yes	Yes	Interest is taxed as per income tax slab rates
Senior Citizens’ Saving Scheme	8.2%	Minimum: Rs.1,000Maximum: Rs.30 lakh	5 years	Yes	Yes	Interest is taxed as per income tax slab rates with deduction of up to Rs.50,000
Tax Saving FDs	5.5% to 7.75%	Minimum: Rs.100Maximum: Rs.1.5 lakh per financial year	5 years	Yes	Yes	Deduction of up to Rs.1.5 lakh p.a.; interest is taxable

Advantages of Savings Schemes

The main advantages of investing in savings schemes are mentioned below:

Long-term benefits: Individuals can achieve their long-term goals such as retirement plans, children’s education, and children’s marriage by investing in savings schemes.
Various savings schemes: The number of savings scheme currently available is large. The benefits vary according to the scheme and the sector. For example, the Pradhan Mantri Jan Dhan Yojana is designed to help people who are below poverty line and the Sukanya Samriddhi Yojana helps a girl child financially.
Hassle-free: The maintenance and investment towards the schemes are very simple and most of the contributions made towards the schemes can be done online.
Security and safety: The contributions that are made towards the schemes are minimal on risk as well as safe and secure since the schemes are launched by the Indian Government.

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Different Types of Savings Schemes

Some of the various schemes that are available are mentioned below:

Tax Saving FDs

Tax saving FDs hold a deduction under Section 80C of the Income Tax Act for investment of up to Rs.1.5 lakh. These fixed-term investments (FDs) have a minimum lock-in period of five years and can be opened at any bank—public or private—or post office.

The interest from tax-saving FDs is subject to tax at your applicable slab rate. For investors seeking low risk and assured profits, it is an appropriate choice. Tax-saving FDs require a minimum investment of Rs.100.

Although there is no upper limit, payments up to Rs.1.5 lakh annually are the only ones eligible for a tax deduction.

Interest rate: Vary from bank to bank. Presently, it is around 5.75% to 8.60%.
Duration: Five years
Minimum Investment: Rs.100
Maximum Investment: No limit
Deduction on Principal: Yes
Tax on Interest: Taxable

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The following table highlights the interest rates of Tax saving Bank FDs

Banks	General	Senior Citizens
State Bank of India	6.50%	7.50%
ICICI Bank	7.00%	7.50%
HDFC Bank	7.00%	7.50%
Bank of Baroda	6.50%	7.15% to 7.50%
Kotak Mahindra Bank	6.20%	6.70%

Unit Linked Insurance Plan (ULIP)

A Unit Linked Insurance Plan is basically an integrated plan that offers investment as well as life cover via a single scheme. ULIPs investment is taxable under Section 80C up to Rs.1.5 lakh per annum and the maturity proceeds of ULIP is exempted under Section 10(10)(D).

ULIPs specify a life insurance coverage which allow the investors to select ULIP funds that invest in equities or/ and debt and function which is very similar to mutual funds. However, the minimum annual investment differs from fund to fund but is mainly set at Rs.2,500.

Interest Rate: Rate of return is not fixed
Duration: Minimum – Five years, Maximum – 20 years

Minimum investment: Rs.2,500
Maximum Investment: NIL
Deduction on Principal: Yes
Tax on interest: Not taxable

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Equity Linked Savings Scheme (ELSS)

Equity Linked Savings Scheme, also known as ELSS is a kind of mutual fund which comes with a lock in period of three years. In fact, this is the only scheme which has a shortest lock in period as compared to the other tax savings schemes in India. The amount invested in ELSS funds are taxable under Section 80C up to Rs.1.5 lakh per annum. The return earned on ELSS funds will be taxable because long term capital gains at a rate of 10%. Dividends from ELSS funds will be taxable at 10% under the Dividend Distribution Tax. ELSS funds have a significant long-term compounding potential because they invest at least 80% of their assets in equities (stocks). The minimum annual investment in ELSS funds in Rs.100, but vary from fund to fund.

Interest Rate: Interest rate is not fixed
Duration: Three years
Minimum Investment: Rs.100
Maximum Investment: None

Deduction on Principal: Yes
Tax on Interest: 10% tax

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Public Provident Fund (PPF)

The Public Provident Fund (PPF) scheme is one of the most popular and safest investment options that is available in the country. Under Section 80C of the Income Tax Act, contributions made towards the scheme as well as the interest that is generated from the contributions are also tax exempt.

The scheme can be opened at post offices and banks, and the duration of the scheme is 15 years. Individuals are allowed to increase the duration of the scheme by a further 5 years. The rate of interest for the FY 2023-2024 is 7.10% p.a. and the interest is compounded on a yearly basis. Individuals must make a minimum contribution of Rs.500 and can make a maximum contribution of Rs.1.5 lakh on a yearly basis towards the scheme.

Interest Rate: Interest rate changes every quarter. Presently it is 7.1%.
Duration: Minimum tenure of 15 years
Minimum Investment: Rs.500 every year
Maximum Investment: Rs.1.5 lakh per year
Deduction on Principal: Yes
Tax on Interest: Not Taxable

Employees’ Provident Fund (EPF)

The Employees’ Provident Fund Organisation (EPFO)launched the EPF scheme with the main aim of helping employees save money for their retirement. It is mandatory for organisations with more than 20 employees to contribute towards the EPF scheme. The employee and employer each contribute 12% of the employee’s Dearness Allowance (DA) and basic salary towards the scheme.

Employees can withdraw funds from the scheme in case of medical emergencies, construction of a house, buying a house or land, repayment of home loan, etc. The rate of interest of the scheme for 2023-2024 is 8.25% p.a. The rate of interest is decided by the EPFO on a yearly basis.

National Pension System (NPS)

The NPS was launched by the Central Government with the main aim of providing individuals a regular income after their retirement. Employees can avail themselves of the benefits of the scheme by paying a small amount of premium. The interest rates offered under NPS scheme for FY 2023-2024 ranges between 4.00% to 9.00%.

Employees will receive a lump sum amount at the time of their retirement as well as a certain percentage will be paid back as pension on a monthly basis after their retirement.

Interest Rate: Based on returns of pension funds
Duration: Till 60 years of age

Minimum Investment: Rs.1,000 per year
Maximum Investment: NIL
Deduction on Principal: Yes
Tax on Interest: Maturity amount is partially taxable

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Sukanya Samriddhi Yojana Account (SSY)

The Sukanya Samriddhi Yojana (SSY) scheme was launched by Prime Minister Narendra Modi to help secure the future of a girl child. The current rate of interest offered by the scheme is 8.2% for FY 2023-2024 and an SSY account can be opened at post offices or banks.

The minimum and maximum deposit that can be made in a year towards the scheme is Rs.250 and Rs.1.5 lakh, respectively. The account holder must make contributions towards the scheme for a duration of 14 years and the maturity period of the scheme is 21 years. Individuals can transfer the SSY account from banks to post offices and vice versa.

Interest Rate: 8.2%
Duration: 21 years
Minimum Investment: Rs.1,000 per annum

Maximum Investment: Rs.1.5 lakh per annum
Deduction on Principal: Yes
Tax on Interest: NIL

Atal Pension Yojana (APY)

The main aim of the scheme is to help individuals who are below the poverty line. The scheme also benefits people who work in the unorganised sector and require financial support from the government. Individuals pay a very low premium towards the scheme and receive a pension after their retirement. However, it is mandatory that individuals have an active savings account in order to avail benefits from the scheme.

Citizens between the ages of 18 years and 40 years can apply for the Atal Pension Yojana scheme. Contributions towards the scheme must be made for a minimum duration of 20 years. Individuals must make very low contributions towards the scheme, however, if the contributions that are being made are high, the pension that is received will also be high. However, in case individuals opt for the Atal Pension Yojana scheme, they cannot opt for any other savings scheme.

Voluntary Provident Fund (VPF)

Employees can opt for the VPF scheme on a voluntary basis. Under the VPF scheme, employees are allowed to contribute their entire basic salary towards the scheme, unlike the EPF scheme, where only 12% of the basic salary can be contributed.

Any contributions made towards the VPF scheme will impact the EPF scheme and vice versa. The rate of interest that is generated from contributions made towards the scheme for the year 2024 is 8.15% p.a.Check FREE Credit Score

Kisan Vikas Patra (KVP)

The Kisan Vikas Patra certificate scheme is offered by post offices in India. The rate of interest that is offered by the scheme at the moment is 7.25% and it is compounded on an annual basis. The minimum contribution that must be towards the scheme is Rs.1,000 and there is no maximum limit. Over the course of 112 months, the amount invested towards the scheme doubles.

Individuals are allowed to add nominees to the scheme and the certificate can be transferred from one individual to another and from one post office to another. Individuals are also allowed to encash the certificate after 30 months from when the certificate was issued.

Interest Rate: 7.5%
Duration: 115 months

Minimum Investment: Rs.1,000
Maximum Investment: None
Deduction on Principal: NIL
Tax on Interest: Yes

Senior Citizens Savings Scheme (SCSS)

The SCSS was launched with the aim of helping individuals who are 60 years and above. Individuals who are between the ages of 55 years and 60 years and have chosen for Voluntary Retirement Scheme (VRS) can also avail the benefits of the SCSS.

The duration of the SCSS is 5 years and the rate of interest under the scheme is 8.20% p.a. for 2023. Individuals must invest a minimum of Rs.1,000 towards the scheme and the maximum investment that can be made is Rs.15 lakh. Individuals can also transfer their SCSS accounts from a post office to a bank and vice versa. Under Section 80C of the Income Tax Act, tax deductions are available for investments made towards the scheme.

Interest Rate: 8.2%
Duration: Five years
Minimum Investment; Rs.1,000

Maximum Investment: Rs.15 lakh
Deduction on Principal: Yes
Tax on Interest: Yes

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National Savings Certificate (NSC)

The NSC scheme is one of the most popular schemes in India. Since the scheme is backed by the Indian Government, guaranteed returns and tax benefits are provided. The duration of the scheme is 5 years and individuals can invest in the scheme at post offices. The Indian Government decides the interest rates of the scheme on a quarterly basis.

The rate of interest of the scheme for FY 2023-2024 is 7.70%. The interest that is generated is compounded on an annual basis. The minimum contribution that must be made towards the scheme is Rs.100 and there is no limit to the amount of contribution that can be made. Under Section 80C of the Income Tax Act, individuals are eligible for tax benefits on the contribution they make towards the scheme. Individuals are also allowed to transfer the certificate to another person’s name. However, this can be done only once.

Interest Rate: 7.7%
Duration: Five years
Minimum Investment: Rs.100

Maximum Investment: None
Deduction on Principal: Yes
Tax on Interest: No

Post Office Savings Scheme

The various savings schemes that are offered by India Post are very popular as the risks are very minimal and most of the schemes provide guaranteed returns.The interest rate offered under the Post Office Saving Scheme is 4.00% as of 1 January 2023. The process to open any saving schemes accounts at the post office is simple and quick. The many good features offered by the schemes also make them popular.

Interest Rate: 4%
Duration: None
Minimum Investment: Rs.50
Maximum Investment: None
Deduction on Principal: No
Tax on Interest: Yes

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Post Office Recurring Deposit Account

You make a fixed monthly contribution into this account, and each installment grows in value. The account offers an annual compound interest rate of 6.5%. This Post Office Recurring Deposit account has a fixed 5-year term, but it can be renewed for another five or ten-year period. The smallest payment is Rs.10. In this account, there is no set maximum investment amount. This plan does not provide a tax break, and the interest it accrues is entirely taxable.

Interest Rate: 6.5%
Duration: Five years

Minimum Investment: Rs.10
Maximum Investment: None
Deduction on Principal: No
Tax on Interest: Yes

Mahila Samman Bachat Patra

In order to celebrate the Azadi Ka Amrit Mahotsav, government has come up with a one time new small savings scheme named Mahila Samman Bachat Patra. The scheme offers a deposit facility of up to Rs.2 lakhs for girls or women at a rate 7.5% along with a partial withdrawal option.

Interest Rate: 7.5%
Duration: Two years
Maximum Investment: Rs.2 lakh

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The savings schemes that are offered by India Post are mentioned below:

Post Office Savings Account
National Savings Time Deposit Account
Senior Citizens Savings Scheme Account
National Savings Certificate Account
Sukanya Samriddhi Account
National Savings Recurring Deposit Account
National Savings Monthly Income Account
Public Provident Fund Account
Kisan Vikas Patra Account

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FAQs on Saving Schemes in India

Can I get a tax rebate for investment in post office savings schemes? Yes, you can claim a Section 80C deduction for investments made in most post office savings schemes. But this tax benefit is not applicable to investments in post office, such as Monthly Income Schemes (MIS) or recurring deposit schemes.
Which post office savings scheme is suitable for 5 years? Investors who want a lock-in period of 5 years can invest in the 5-Year Post Office Recurring Deposit Account (RD).
Can students open a post office savings Scheme? Yes, students above 18 years can invest in the post office saving scheme except for Sukanya Samriddhi Yojana (SSY) and Senior Citizen Savings Scheme (SCSS). This is because SSY can be opened by the girls’ parents or guardian for their girl child who is below 10 years of age and SCSS can be opened only by senior citizens.
How to buy Kisan Vikas Patra? To purchase a Kisan Vikas Patra, you can visit your nearest post office or authorised bank to purchase the Kisan Vikas Patra. Obtain a KVP application form (Form A) from the Post Office; fill in the required details; and submit the completed form along with necessary documents, such as address proof and proof of identity. You will receive the KVP certificate after making the payment as specified under the scheme details.
Which post office scheme gives 8% interest? The Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Account Scheme offered by the post office provides a rate of interest of 8.20%. These schemes are specifically designed for individuals aged 60 and above and a girl child of 10 years of age, respectively. These schemes offer regular interest payouts along with a secure investment option.
Which savings scheme gives the highest returns? Some of the saving schemes that offer high returns are Sukanya Samriddhi Yojana, National Savings Certificate, Public Provident Fund, Recurring Deposits (RD), Kisan Vikas Patra, etc.
What is a small saving scheme? These schemes encourage saving habits while providing steady returns to the investors. These schemes are known for their safety and stability, thereby smaking them suitable for risk-averse investors. Popular mall saving schemes offered by the government include the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, and National Savings Certificates (NSC).
What is a government saving scheme? Government saving schemes are those schemes offered by the government that encourage the habit of savings among the citizens of the country. These schemes come with tax benefits, attractive interest rates, secure payment options, and have lower risk than other investment options.
What is the importance of saving scheme in India? The savings schemes in India helps achieving long-term financial goals; ensures financial safety; helps in retirement planning; manages personal finance through monthly income scheme option; ensures tax savings; and provides easy access to the fund due to online services.

News about Saving Schemes

Government hikes interest rates for SS schemes

The Senior Citizen Savings Scheme (SCSS) interest rate for the April-June 2024 quarter has been maintained at 7.4%. This rate remains unchanged from the previous quarter, offering stability to senior citizens seeking secure investment avenues. The SCSS is a government-backed savings scheme tailored for individuals aged 60 years and above, providing them with regular income post-retirement. With a maximum investment limit of Rs.15 lakh per individual, the scheme offers quarterly interest payouts to subscribers. The SCSS interest rate, which is fixed quarterly, continues to offer competitive returns compared to other fixed-income investment options available in the market. This announcement provides assurance to senior citizens and investors regarding the consistency and reliability of returns offered by the SCSS.

The government has announced the interest rates for various small savings schemes for the April-June quarter. The rates for Public Provident Fund (PPF) remain unchanged at 7.1%. However, the interest rate for the Sukanya Samriddhi Account Scheme has been reduced from 7.6% to 7.4%. Rates for other schemes like National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) remain constant at 6.8% and 6.9%, respectively. These small savings schemes continue to offer competitive returns to investors, contributing to their popularity among individuals seeking secure investment options.

12 March 2024

Employee Provident Fund Organization sets 8.25% EPF interest rate for FY 23-24

On 10 February 2024, the Employees’ Provident Fund Organisation increased the interest rate on provident fund deposits to 8.25% for 2023-24, up from 8.15% the previous year and 8.10% in 2021-22. This hike is helpful to over 65 million EPFO subscribers, driven by robust financial returns, notably from equity investments.

12 February 2024

Courtsey To : Bankbazaar