Government-Backed Schemes with Higher Returns Than Bank FDs

📈  Government-Backed Schemes with Higher Returns Than Bank FDs

1. Public Provident Fund (PPF)

   • Interest: ~7.1% p.a. (current rate)

   • Highlights: 15‑year lock‑in, tax-free interest, and Section 80C deduction; sovereign-backed.

2. National Savings Certificate (NSC)

   • Interest: 7.7% p.a.

   • Highlights: 5-year lock-in, compounding, eligible for 80C deductions, can be pledged as loan collateral.

3. Senior Citizen Savings Scheme (SCSS)

   • Interest: 8.2% p.a.

   • Highlights: 5-year tenure (extendable), quarterly interest payouts, open to those aged 60+ (or early retirees).

4. Sukanya Samriddhi Yojana (SSY)

   • Interest: ~8.2% p.a.

   • Highlights: For girl-child education/savings, lock-in until age 21, excellent returns, tax benefits.

5. Kisan Vikas Patra (KVP)

   • Interest: 7.5% p.a. (doubles your money in ~124 months)

   • Highlights: 124-month maturity, no max limit, can be held in individual or joint names.

6. Post Office Time Deposit & Monthly Income Scheme (POMIS)

   • Time Deposit: up to 7.5% for 5-year option

   • POMIS: ~7.4% p.a., monthly payout, 5‑year lock-in

🧭 Why these beat bank FDs:

• Higher interest rates than most bank FDs.

• Government guarantee keeps them very safe.

• Many come with Section 80C tax deductions, lowering your effective yield.

🔍 Snapshot Comparison

✅ Considerations Before You Invest:

• Most of these have lock-in periods (ranging from 5 to 15 years).

• Eligibility differs—e.g., SCSS for seniors, SSY for girl children.

• Tax status varies: PPF interest is tax-free, others are taxable but some qualify under 80C.

• Liquidity constraints: KVP is non-liquid for 2.5 years; PPF only allows limited withdrawals after 7 years.