EXPLAINED: The minimum investment required to invest in government-backed savings schemes

Investing wisely is key to financial success and stability. One of the best ways to ensure your money grows over time is through government-backed savings schemes. The Government of India has launched several such schemes aiming to promote healthy savings and investment habits among its citizens.

Here, we explore the minimum investment required to enter some of these government-backed savings schemes: 

Atal Pension Yojana (APY)

The APY is designed as a social security scheme to provide a defined pension. The scheme has a variable interest rate and the pension commences after the age of 60 years. The minimum monthly investment limit in APY starts at Rs 42.

Kisan Vikas Patra (KVP)

This is a savings scheme initially launched by the Department of Post. The KVP doubles the initial investment made in approximately 124 months (10 years and 4 months), with the current interest rate standing at 6.9 per cent. The minimum investment for KVP is Rs 1,000, and there's no maximum limit.

What is National Pension Scheme?

NPS is government-initiated pension and investment scheme that provides a disciplined platform for long-term savings. The current interest rate is 7.1 per cent, with the minimum investment limit being Rs 1,000, and there's no maximum limit.

How to invest in National Savings Certificate (NSC)?

This scheme offers a platform for small and medium-scale investors to grow their capital while enjoying tax deductions under Section 80C of the Income Tax Act. It comes with an interest rate of 6.8 per cent and an investment commitment period of 5 years. The base investment limit for NSC is set at Rs 100.

How to invest in PPF?

The Public Provident Fund offers an avenue for people to engage in long-term savings, offering appealing interest rates and tax-free gains. As of now, it offers a 7.1 per cent interest rate and a fixed investment period of 15 years. The least amount to be invested yearly is Rs 500, and the maximum allowable is Rs 1.5 lakh within a fiscal year.

Senior Citizens Savings Scheme (SCSS)

This scheme caters specifically to individuals 60 years or older, and provides a dependable route for investment. It has a current interest rate of 7.4 per cent and a fixed commitment period of 5 years. The lowest allowable investment in SCSS is Rs 1,000, while the highest is Rs 15 lakh.

How to invest in Mahila Samman Savings Certificate?

The Mahila Samman Savings Certificate is a dedicated savings programme for female investors in India, aimed at bolstering financial autonomy through attractive savings returns. Certificates can be issued for a minimum amount of Rs 1000, with no upper limit.

The scheme proposes an interest rate slightly more appealing than that of standard savings schemes to encourage more female investment. Like other small savings initiatives, this programme can be initiated at an authorised bank or post office. Any benefits accrued from this scheme can be claimed under Section 80C of the Indian Income Tax Act.

What is Sukanya Samriddhi Yojana? How to invest

This scheme is uniquely available for a girl child under 10 years, initiated by parents or a legal guardian. An account can be set up at a certified bank or postal service. Contributions begin at Rs 250, with an annual maximum of Rs 1.5 lakh.

Other Small Savings Schemes

Participation in other small savings schemes typically involves a visit to your local post office or approved bank branches. Some of these initiatives may also be accessible through digital platforms, so it's worth exploring the websites or online services of individual banks.