How Small Savings Schemes Can Help You Increase Your Monthly Savings

Regular income is a must in everyone’s life. Though high cost of living and growing materialistic needs
has reduced our savings bank account balance, many strive to increase it. Financial success and a
high bank balance are considered as a sign of achievement in this society. Making sure you receive a
monthly cash flow can be challenging.

To make sure you have sufficient savings for your post-retired life, you will have to start saving early.
There are many small savings schemes that one can choose from to build their savings portfolio.
Listed below are some of the most popular savings instruments you can invest to start saving:

Senior Citizens' Saving Scheme (SCSS)

Opening a Senior Citizens Savings Scheme is one of the easiest ways to start saving. This scheme is
available for senior citizens who are planning to have a regular flow of income throughout their
retired life. SCSS can be started in any of the post office or banks in India by anyone who has
reached the age of 60 years. Some of the features of SCSS are:

• The maturity period of SCSS is 5 years.
• An account holder can open more than one SCSS account individually or jointly with a spouse. 
• An SCSS account holder avail nomination facility.
• Currently, the interest earned on an SCSS account is 8.4% p.a.
• If the acquired interest on an SCSS account is more than Rs.1,000, the tax is deducted at source.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

This scheme was launched on 4 May 2017 to help senior citizens build a regular monthly cash flow
every month post-retirement. This scheme can be operated only by LIC (Life Insurance Corporation
of India). Senior citizens can buy PMVYY online or at any LIC office. Under this scheme, one can
earn an interest rate of 8% to 8.30% p.a based on the frequency of pension (monthly, quarterly,
semi-annually, and annually) chosen by them during the inception of the policy. Some of the features
of this scheme are:

• The minimum purchase price to be eligible for monthly pension is Rs.1.5 lakh.
• With an investment of Rs.1.5 lakh, an account holder will get Rs.1,000 as monthly pension.
• The maximum purchase price under this scheme is Rs.7.5 lakh which will return Rs.5,000 monthly pension.
• If the account holder survives throughout the tenure of the plan, the purchase price along with the final pension installment will be payable. 
• If the pensioner dies during the term, the purchase price will be paid as a death benefit to the beneficiary.

Post Office Monthly Income Scheme

A post office monthly income scheme is a savings scheme that can be opened by any individual.
This is a 5-year investment plan with a maximum investment of Rs.9 lakh if opened jointly
and Rs.4.5 lakh if opened individually. Some of the features of this scheme are:

• Currently, the interest rate on post office monthly schemes is 7.6% p.a.
• Nomination facility is available under the post office monthly income scheme.
• A post office monthly income scheme can be opened in the name of a minor as well. 
• A joint account may be opened by two or three people. 

Systematic Withdrawal Plans From Mutual Funds

One of the best ways to get regular savings is to invest in mutual funds. One should know how to
invest to make money in the mutual fund industry. While SWP holders make money and are allowed
to withdraw the money at once, equity fund usually suffers a sharp decline.

RD Deposits

RD Deposits are another great way to earn extra every month. It is a low risk financial instrument in
which an account holder locks his/her funds for a fixed period of time which earns rate of returns.
One can choose if they want monthly, quarterly, yearly return.

Start investing when you are young to have a financially safe future.