government investment schemes / government investment schemes with higher returns / best government schemes

Unsure about investing in government schemes? Read this!

. 4 min read . Written by Kool Kanya Learning
Unsure about investing in government schemes? Read this!

Never thought you can make money through the government? Well, think again because you might not be aware of the wonders of investing in government schemes.

Government investing schemes were introduced to encourage people to save money. Banks, financial institutions, and post offices are used by the government to carry out these schemes. Investors in these schemes can benefit from tax breaks and make money at a fixed rate of interest set by the government.

Investing can be daunting and playing it safe is the way most people choose to go. Because when it comes to investing, you can test the waters but you wouldn’t want to dive deep enough to drown. This is precisely what this blog is here to help you with.

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Kool Kanya is at your service.

Index:

  1. National Pension Scheme
  2. Public Provident Fund
  3. Sovereign Gold Bonds
  4. Post Office Monthly Income Schemes
  5. National Savings Certificate

Best government schemes to invest in 2022

Who doesn’t want to increase their wealth in a reliable and steady way? But still, the fear of losing money while investing is real. Investing in government schemes is ideal for you if you are looking for a low-risk investment with good returns.

Following are top safe government investment schemes with high returns that you can invest in and earn good money with the least amount of risk:

Warning: None of these tips are professional advice and the reader is suggested to conduct their own research before engaging with the investment market.

  1. National Pension Scheme

The National Pension Scheme, or NPS, is one of the most well-known schemes provided by the Indian government. It is a retirement savings scheme available to all Indians, and required of all government employees. It aims to give Indian citizens retirement income. NRIs and Indian citizens between the ages of 18 and 60 can invest in this scheme.

You can distribute your funds among government securities, corporate bonds, and equity under the NPS scheme. Section 80 CCD allows for tax deductions on investments up to INR 50,000. (1B). Section 80C of the income tax act permits tax deductions for additional investments up to INR 1,50,000.

2. Public Provident Fund

PPF is one of the first retirement plans the Indian government ever introduced. Taxes are not due on the amount invested, interest received, or the amount withdrawn. As a result, the Public Provident Fund is not only secure, but also advantageous for tax purposes. The scheme's current annual interest rate (FY 2020–2021) is 7.1%. Under section 80C of the Income Tax Act, PPF investments are eligible for tax deductions of up to INR 1,50,000. The fund spreads over a long duration of 15 years, so tax-free compounding interest tends to have a bigger overall impact, especially in the later years.

PPF is known to make money as interest is earned and the invested principal is protected by the relevant sovereign guarantee to make a secure investment. It is significant to remember that the Indian Government reviews the overall rate of interest on PPF on a quarterly basis. So, if you are looking for a super safe investment, this is clearly the way to go.

3. Sovereign Gold Bonds

In November 2015, the Indian government launched the Sovereign Gold Bonds. It aims to provide a profitable alternative to owning and storing gold. The scheme is also recognised as falling under the debt fund category. Sovereign Gold Bonds, or SGBs, assist in ensuring transparency throughout while also assisting in monitoring the overall import-export value of the given asset. Government-based securities are referred to as SGBs. These are therefore thought to be 100 percent secure. The relevant value is expressed as the number of grams of gold. SGBs are extremely popular among investors because they are the safest alternative to physical gold.

4. Post Office Monthly Income Schemes

The Post Office Monthly Income Scheme (POMIS), is a small government investment scheme that enables investors to set aside (save) a specific sum each month. Then, at the applicable rate, interest is added to this investment and distributed to the depositor(s) on a monthly basis.

Here, post offices provide it as a secure investment option where you can invest between INR 1,500 and INR 4.5 lakh.

5. National Savings Certificate

The Government of India introduced the National Savings Certificate to encourage Indians to save money. There is no maximum investment amount for this scheme, and the minimum investment is INR 100. Every year, the NSC interest rate varies. The interest rate for NSC is 6.8% compounded annually starting on April 1, 2020, but it is only due upon maturity. Under Section 80C of the Income Tax Act, a tax deduction of INR 1.5 lakh may be claimed. The only people who may invest in this scheme are Indian citizens.

Hey government investment expert!

Let's leave that uncertainty at bay and take the plunge into these more unknown known waters and see where they take you.

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