What are the Saving Schemes?

Small savings schemes are the household saving schemes notified by the Central Govt., such as Public Provident Fund, Senior Citizens Savings Scheme, Post Office Recurring Deposit, Sukanya Samriddhi Scheme, etc. The rate of interest on such small saving schemes is notified quarterly.

Saving Schemes

These schemes guarantee returns with minimal risk and volatility. They can be opened in various ways and start with – monthly, quarterly, half-yearly, and yearly schemes.

  • Public Provident Fund (PPF) Scheme
  • Sukanya Samriddhi scheme
  • Kisan Vikas Patra (KVP) Scheme
  • Post Office Savings Account Scheme
  • National Savings Time Deposit Scheme
  • Equity Linked Savings Scheme (ELSS)
  • Atal Pension Yojana (APY)
  • National Pension System (NPS)
  • Employees Provident Fund (EPF)
  • Post Office Monthly Income Scheme ( POMIS)
  • Beti Bachao Beti Padhao (BBBP)
  • Ladli Laxmi Yojana
  • Balika Samridhi Yojana
  • Senior Citizen Saving Scheme

Public Provident Fund (PPF) Scheme

PPF scheme introduce in 1968, it is aimed to foster the habit of saving and investment for      post-retirement security. It is provide the benefit of 80C under income tax act. Any Indian person can open a PPF account by depositing minimum of Rs. 500.00 (Five Hundred) and maximum    Rs. 1,50,000.00 (One Lac Fifty Thousand) only in a financial year.

Loan facility is also available from 3rd to 6th Financial Year and any person can withdrawal his total deposit with interest earned every year from 7th financial year. It can be opened for the maximum 15 Year of period. The amount deposit in PPF is subject to attachment under any order or decree of law.

Interest Rate & Computation

The rates are revised every quarter. The interest is computed on the lowest balance between 5th to end of month. So the best time to invest in lump sum amount before 5th of the month. The PPF interest is credited annually to the account on the 31st of March every year.

Here are the best examples for better understanding of PPF maturity

Example: – Mr. Sundar deposit a lump sum of Rs. 1,00,000.00 (One lac) yearly in his PPF account of 15 Year @ 7.1 ROI.

Formula:-

i= F-P

F= P[({(1+i)^n}-1)/i]*(1+i)

P = the principal amount

i = the expected rate of interest

F = maturity amount

n = the duration of the investment

I = interest Amount

F = P[((1+i)n-1)/i];

F= 1,00,000[({(1+0.071)^15)-1}/0.071]*(1+0.071) = Rs. 27,12,139.


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