5 Best Government Schemes: For middle-class families, balancing income and expenses is often not easy. After meeting household responsibilities, children’s education, rent or EMIs, groceries, and essential expenses like electricity and water from their salary, saving for the future becomes a challenge. However, making the right investments in time is crucial for an independent life after retirement. Keeping this need in mind, we are telling you about 5 safe government schemes that can prove helpful in old age.
Employees’ Provident Fund (EPF)
EPF is an important social security scheme for employees working in the government or private sector. In this scheme, 12% of the employee’s basic salary is deposited into the PF account every month, and an equal contribution is made by the employer (company).
This fund usually matures at the age of 58. A partial withdrawal facility is also available if needed. Investments made in EPF are eligible for tax exemption under Section 80C of the Income Tax Act.
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Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme is a safe and beneficial option for people aged 60 years or older. This scheme currently offers an annual interest rate of 8.2%.
Its maturity period is 5 years, and a person can invest a maximum of Rs. 30 lakh. Interest is paid every three months. Investments in this scheme also qualify for a tax deduction of up to Rs. 1.5 lakh under Section 80C. If both husband and wife invest, the regular income increases further.
Public Provident Fund (PPF)
If you want safe returns along with tax savings, PPF is an excellent option. It is a completely risk-free scheme and falls under the EEE category, meaning that investment, interest, and maturity are all tax-free.
The tenure of PPF is 15 years. A minimum of ₹500 and a maximum of ₹1.5 lakh can be invested annually in this scheme. Currently, it offers an annual interest rate of 7.1%.
Unified Pension Scheme (UPS)
The Unified Pension Scheme is a new pension plan launched for government employees. Under this scheme, after retirement, the employee will receive 50% of their average basic salary of the last 12 months as a pension.
This scheme also provides a family pension facility, under which the dependents of the employee receive 60% of the pension after the employee’s death. This pension also includes dearness allowance (DA), which is determined according to inflation.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY is a pension scheme specifically designed for senior citizens aged 60 years and above. It offers a guaranteed return of 7.4% for 10 years. This scheme is not affected by market fluctuations, providing financial security to the elderly. An individual can invest a maximum of ₹15 lakh in this scheme. Based on the investment amount, options for monthly, quarterly, or annual pension payments are available. The entire principal amount is returned upon maturity.