Government Schemes to Invest in India in the Year 2025

Government Schemes to Invest in India in the Year 2025

If you are planning to invest in such investment plans, but are wondering where to start, we’ve got you covered. Listed below are 6 of the most popular government investment options to consider. Let’s begin.

Atal Pension Yojana

This is a pension scheme that provides a monthly income to people who work in the unorganised sectors of the country. Named after Shri Atal Bihari Vajpayee, former Prime Minister, people in the age group of 18 to 40 years can apply for this scheme. The government makes a co-contribution of 50% of your contribution (annually) or ₹1,000, for a limited period.

• Lock-In: Premium is to be paid for at least 20 years
• Payout: Minimum pension: ₹1,000; Maximum: ₹5,000
• Tax benefits: Contributions can get tax exemption under Section 80CCD(1).
• Contributions: Can be flexible, as per your needs.

Post Office Monthly Income Scheme

If you are looking at an assured monthly income, then you can opt for this fixed-income, risk-free investment plan.

• Annual Rate of Interest: 7.4%, revised every quarter
• Lock-In: 5 years
• Liquidity: Premature withdrawal allowed after 1 year (you’ll have to bear a penalty)
• Taxation: The interest earned will be taxed as per your tax slab
• Investment: Minimum: ₹1,000; Maximum: ₹9 lakh (for single accounts) or ₹15 lakh ( for joint accounts)

Sukanya Samriddhi Yojana (SSY)

If you are the proud parents of daughter/ daughters under 10 years of age, the SSY is one of the best government investment plans that you can invest in. Triple E tax benefits, yearly compounding of interest, and premature withdrawals make this a great option. You contribute for the first 15 years, while interest is earned uptill account maturity.

• Annual Rate of Interest: 8.2% revised quarterly
• Contribution period: 15 years
• Liquidity: You can make premature withdrawals under certain specified conditions
• Taxation: Tax-free
• Investments in a year: Minimum: ₹250; Maximum: ₹1.5 lakhs.

National Savings Certificate (NSC)

Ideal for investors who want a fixed-return investment plan, NSC also allows tax benefits. Offered by post offices, you can open an account in a few simple steps. At the time of maturity, you can get your principal amount along with the compounded returns.

• Rate of Interest: 7.7% per annum
• Lock-In: 5 years
• Liquidity: No partial withdrawal allowed
• Taxation: The interest earned will be taxed as per your tax slab
• Minimum Investment: ₹1,000

Public Provident Fund

If you wish to invest regularly and watch your savings grow steadily, the PPF can be an ideal investment plan. You can invest a small amount every month or/make lumpsum investments as and when you want. Without worrying about the fluctuations in the market, you can get assured and fixed returns.

• Rate of Interest: 7.7% (compounded yearly)
• Lock-In: 15 years (you can extend it in blocks of 5 years)
• Liquidity: lock-in period of 15 years
• Taxation: ₹1.5 lakh per year are eligible for tax deductions under Section 80C
• Investment (per year): Minimum: ₹500; Maximum: ₹1.5 lakh

Senior Citizens Savings Scheme

Another saving scheme for people over 60 years of age, the SCSS can be an ideal option if someone wants to invest a lumsum (often their retirement gratuity) and turn it into a steady income.

• Rate of Interest: 8.2%, revised every quarter
• Lock-In: 5 years, which can be extended for 3 more years
• Liquidity: Premature withdrawal allowed (you’ll have to bear a penalty)
• Taxation: The interest earned will be taxed as per your tax slab
• Investment: ₹1,000 to ₹30 lakhs.

Choosing the Best Government Investment Schemes

As an investor, you will have to spend some time understanding these options and aligning them with your financial needs. Once you have shortlisted a few options, factor in the following before you make a decision:

1. While government schemes provide security, bear in mind that no investment plan can be 100% risk-free. There is always a certain degree of risk.
2. Certain schemes are designed for women, while some offer them special benefits.
3. Different government schemes come with different lock-in periods. Make sure you consider the maturity period.
4. Schemes like PPF and NPS allow regular investment. Rather than making regular payments, you can deposit as and when you like. Make sure you choose the plan carefully.
5. Most government schemes offer tax benefits on the premiums that you pay and in some cases, the maturity benefit. Ensure that you understand these benefits and can make the most of your investment.

In Conclusion

The government investment plans come with an inherent security. Some investors may consider them to have low returns compared to other market-linked instruments. However, it cannot be denied that market-linked returns come with uncertainties.

Government schemes, on the other hand, offer peace of mind, consistent returns, and a strong foundation for financial planning. They can be a perfect fit for someone seeking to strike a balance between risk and reward. At Jio Insurance Broking, we suggest a our customers create a diversified portfolio, which should be a careful mix of different kinds of investment plans.