The government has launched several schemes to instill the habit of saving and encourage people to invest in government-supported schemes to enjoy tax benefits and risk-free investment.
If you are looking for an investment with a safe return, you can consider investing in the following schemes. However, if you have already made some investments, you can consider altering the amount based on the risk factors. The government implements these schemes through financial institutions, banks, and post offices.
If you are comfortable with low risk and medium returns, then government-backed investment options will be your ideal choice.
There are some of the government investment opportunities for you:
G-Secs (Government Securities)
Retail investors can invest in government securities, (T-Bills) treasury bills, and bonds issued by the Indian government in a variety of ways in the primary market.
The maturity date of G-Sec varies from 91 days to 40 years, depending on the length of the arrangement of the liabilities of the respective organization.
Benefits Of Investing In Government Securities
- G-Secs can be kept in a current Demat account.
- Since they are sovereignly secure, there is no risk of default.
- TDS is not applicable on interest.
- G-Secs can also be used as collateral for borrowing funds in the repo market.
- They can be quickly traded on the secondary market.
APY (Atal Pension Yojana)
Atal Pension Yojana (APY) is a pension scheme for Indian residents, which focuses on workers in the unorganized sector.
According to Atal Pension Yojana, a fixed minimum pension will be provided at the age of 60 years, based on donations provided by subscribers.
Benefits Of Joining Atal Pension Yojana Scheme
- The tax exemption applies to payments made by individuals to Atal Pension Yojana in accordance with section 80CCD of the Income Tax Act of 1961.
- After the death of the contributor, the pension will automatically belong to the spouse of the default nominee.
- The government of India will also jointly contribute 50% of the subscriber’s contribution or Rs 1,000 per year, whichever is lower.
SGBs (Sovereign Gold Bonds)
SGBs (Sovereign Gold Bonds) are government securities denominated in grams of gold. The bond is issued by the Reserve Bank of India (RBI) on behalf of the Indian government. Investors must pay the agreed price in cash, and the bond will be redeemed in cash at maturity.
Benefits Of Sovereign Gold Bonds
- Eliminate storage risks and costs.
- SGB is exempt from issues such as purity and charges.
- Bonds can be held in the form of a Demat.
- TDS does not apply to this bond.
- The bond is eligible as collateral for loans from banks.
Sukanya Samriddhi Yojana Scheme
The government initiated the Sukanya Samriddhi Yojana project to improve the betterment of girl child. According to Section 80C of the Income Tax Act, investments made under the Sukanya Samriddhi schemes are not included in the income tax.
PPF (Public Provident Fund)
PPF is one of the most popular investment avenues among Indians. This is a tax-free savings scheme. Individuals can invest no more than 150,000 rupees in their PPF account each year, and can also obtain tax incentives in accordance with Section 80C of the Income Tax Act.
National Pension Scheme
National Pension Scheme (NPS) aims to encourage people to save for retirement. It is an effort to find a permanent solution to provide enough retirement income for every citizen of India.
National Pension Scheme is a successful scheme for people who want to arrange early retirement and have a low-risk appetite.
Benefits Of National Pension Scheme
- National Pension Scheme offers a wide range of investment options and preferences for pension funds (PFs).
- There is a deduction of up to Rs 1.5 lakh can claim for the contribution made.
- Before retirement, the accumulation of pension wealth will increase over time and produce compound effects.
- Opening an account with NPS is easy. It provides seamless migration across jobs and locations.
PMVVY (Prime Minister Vaya Vandana Yojana)
Pradhan Mantri Vaya Vandana Yojana is a pension scheme specially provided by the Indian government for senior citizens aged 60 years and above.
Benefits Of Pradhan Mantri Vaya Vandana Yojana Scheme
- Pensions shall be paid at the required frequency at the end of each period of the 10-year policy period.
- The scheme is exempted from GST.
- After 3 policy years, the maximum loan purchase price is 75%.
- The scheme initially provided a fixed rate of return of 7.66% per year during 2020-21 and will be reset thereafter.
Pradhan Mantri Jeevan Jyoti Bima
Pradhan Mantri Jeevan Jyoti Bima is a term insurance plan launched by the Indian government. This plan aims to protect your family’s future through life insurance cover. This insurance scheme provides life insurance cover for death from any cause.
Benefits Of Pradhan Mantri Jeevan Jyoti Bima
- According to the provisions of Article 80C of the Income Tax Act, the premiums collected by the scheme shall liable for tax incentives.
- Other important government schemes.
- In the case of sudden demise, this provides 2,00,000 rupees as compensation to the beneficiary.
NSC (National Savings Certificate)
The National Savings Certificate (NSC) is sponsored by the Government of India and can provide you with a guaranteed return with almost no risk.
The NSC has a set maturity period of 5 years. There is no upper limit for the purchase of NSC, but according to Section 80C of the Income Tax Act, only investments not exceeding Rs 150,000 can bring you a tax rebate.
As the government continues to adjust functionality and interest rates regularly, make sure to pay close attention to investment schemes.