Small Saving Scheme
Are you looking at some simple tax saving instruments? If so, small saving schemes are an attractive option. Moreover considering the returns it is not a bad investment vehicle either, if you are not too particular about the lack of liquidity of such schemes. These small saving schemes have been time-honored tax saving vehicles, designed to provide safe and attractive investment options to the public, at the same time to mobilize resources for development.
Small Savings Schemes: Instruments
Kisan Vikas Patras (KVPs)
Kisan Vikas Patras (KVPs) are available at all Head Post Offices and authorized post offices throughout India. The KVPs are measured as the most safe investment tool, as it has the backing of the Government of India. The principal is assured (guaranteed) and it is deemed to be a safe avenue for investing your money.
KVP is suitable for an increase in investment as it accumulates money at a fixed rate, and money doubles at the end of the specified period. It is for those looking for guaranteed returns.
National Savings Certificate (NSCs)
National Savings Certificate is an assured return Tax Saving instruments. It pays interest at 8 per cent for a duration of six years, which is relatively lower compared to other small saving schemes. You buy NSC for a specific value and the interest compounded and returned along with the principal amount on maturity. The scheme has the backing of the Government of India so there are no risks associated with your investment.
Post office recurring deposit (PORD)
Post office recurring deposit (PORD) account is a systematic way of saving money. The scheme is meant for those investors who want to deposit a fixed amount regularly on monthly basis in order to get a tidy sum after a definite time on the maturity of the account.
Post Office Monthly Income Scheme (POMIS)
Post Office Monthly Income Scheme (POMIS) is meant for those investors who want to invest a lump sum and earn interest on monthly basis for their livelihood. The scheme is, therefore, a boon for retired or handicapped persons. They would get an amount every month and they can live on it. A good number of people go for this scheme on reaching retirement age. They just put their saving in a post office under this head and then they can just enjoy their life with family and friends while the post office, thanks to their deposited money, would take care of their monthly income.