High Return Saving Plans to Secure Your Future with Minimal Risk

Financial stability and long-term security require smart investment decisions. Whether saving for retirement, children’s education, or a major life goal, choosing the right saving plans is crucial. Investors often seek options that offer high returns with minimal risk, ensuring capital protection while generating consistent earnings.

In India, multiple investment avenues cater to conservative investors who prioritise security alongside returns. This article explores the best high return saving plans that help secure your financial future while mitigating risks.

Public provident fund (PPF)

The public provident fund (PPF) is one of the safest and most popular long-term investment options in India. It is a government-backed scheme that offers tax benefits and steady returns, making it ideal for individuals seeking low-risk investments.

• Interest rate: PPF offers an interest rate of around 7.1% per annum, compounded annually, with rates reviewed quarterly by the government.
• Tenure: The lock-in period is 15 years, with an option to extend in blocks of 5 years.
• Investment limits: A minimum of Rs. 500 and a maximum of Rs. 1.5 lakh per financial year can be invested.
• Tax benefits: Investments qualify for deductions under section 80C of the Income Tax Act, and the interest earned is tax-free.

PPF is best suited for long-term financial goals such as retirement planning or children’s education.

Fixed deposits (FDs)

Fixed deposits (FDs) are one of the most preferred low-risk investment instruments, offering assured returns over a fixed tenure. Banks and non-banking financial institutions (NBFCs) offer competitive FD rates.

• Interest rate: Typically ranges from 6.5% to 8% per annum, depending on the bank and tenure.
• Tenure: FDs can be held for periods ranging from 7 days to 10 years.
• Safety: Deposits up to Rs. 5 lakh are insured under the deposit insurance and credit guarantee corporation (DICGC).
• Taxation: Interest earned is taxable, but tax-saving FDs with a 5-year lock-in period qualify for deductions under section 80C.

FDs are ideal for investors looking for stable, risk-free returns without market fluctuations.

National savings certificate (NSC)

The national savings certificate (NSC) is a government-backed fixed-income investment scheme, primarily targeted at small to mid-income investors.

• Interest rate: NSC offers approximately 7.7% per annum, compounded annually and payable at maturity.
• Tenure: A fixed term of 5 years.
• Investment limits: No maximum limit, but investments up to Rs. 1.5 lakh qualify for tax deductions under section 80C.
• Taxation: Interest is taxable but reinvested for the first four years, qualifying for section 80C deductions.

NSC is suitable for conservative investors looking for moderate returns while enjoying tax benefits.

Kisan vikas patra (KVP)

Kisan vikas patra (KVP) is a savings certificate scheme that guarantees the doubling of investments over a fixed period.

• Interest rate: Currently around 7.5% per annum, compounded annually.
• Tenure: The investment doubles in approximately 10 years and 4 months.
• Investment limits: The minimum investment is Rs. 1,000, with no upper limit.
• Taxation: Interest earned is taxable, and there are no tax benefits on the invested amount.

KVP is ideal for individuals seeking a safe, long-term investment with assured growth.

Recurring deposits (RDs)

Recurring deposits (RDs) allow individuals to make regular investments while earning interest, similar to fixed deposits.

• Interest rate: Typically ranges from 6% to 7.5% per annum.
• Tenure: Available for 6 months to 10 years.
• Investment limits: Minimum monthly deposits can be as low as Rs. 100, with no maximum limit.
• Taxation: Interest earned is taxable as per the investor's income slab.

RDs are suitable for individuals with a regular income who wish to cultivate a disciplined savings habit.

Post office monthly income scheme (POMIS)

The post office monthly income scheme (POMIS) is a government-backed savings plan that offers a fixed monthly income to investors.

• Interest rate: Around 6.6% per annum, payable monthly.
• Tenure: 5 years.
• Investment limits: The maximum investment is Rs. 4.5 lakh for single accounts and Rs. 9 lakh for joint accounts.
• Taxation: Interest earned is taxable, and there are no tax benefits on the investment amount.

POMIS is ideal for retirees or individuals looking for a stable monthly income.

Senior citizens savings scheme (SCSS)

The senior citizens savings scheme (SCSS) is designed specifically for senior citizens, offering attractive returns with government security.

• Interest rate: Approximately 8.2% per annum.
• Tenure: 5 years, extendable by 3 years.
• Investment limits: Minimum deposit of Rs. 1,000, with a maximum limit of Rs. 30 lakh.
• Taxation: Interest earned is taxable, but investments qualify for deductions under section 80C.

SCSS is an excellent option for retirees seeking safe and regular income post-retirement.

Unit linked insurance plans (ULIPs)

Unit linked insurance plans (ULIPs) combine insurance coverage with investment in market-linked funds.

• Investment options: Policyholders can invest in equity, debt, or balanced funds.
• Returns: Dependent on market performance.
• Tax benefits: Premiums paid qualify for deductions under section 80C, and maturity proceeds are tax-free under section 10(10D).
• Liquidity: Partial withdrawals are allowed after 5 years.

ULIPs are suitable for investors looking for a combination of insurance and wealth creation.

Term insurance with return of premium

Term insurance is a must-have financial product, providing financial security to your family in your absence. Term insurance with return of premium (TROP) ensures that if the policyholder survives the term, all premiums paid are refunded.

• Coverage: Provides life cover and refunds total premiums upon survival.
• Premiums: Higher than standard term insurance.
• Tax benefits: Eligible for tax deductions under section 80C.

TROP is ideal for those seeking both protection and guaranteed returns.

Conclusion

Selecting the right saving plans depends on individual financial goals, risk appetite, and investment tenure. Low-risk instruments such as PPF, NSC, FDs, and SCSS offer stable returns and government-backed security. For those looking to balance security with market exposure, ULIPs and term insurance with return of premium provide long-term wealth creation while ensuring financial protection.

Before investing, assess your financial objectives, evaluate risk tolerance, and diversify your portfolio to maximise returns while securing your future with the best available saving plans.