Government Schemes to Invest in India in 2026

Government Schemes to Invest in India in the Year 2026

Government schemes are attractive instruments which allow an investor to invest in secure government-backed financial tools. Different schemes offered by the government can aid different types of investors with different financial goals. However, these schemes unanimously offer protection of capital, tax benefits and a scope for long-term investment.

Best Government Investment Schemes in India

Here is a list of some of the best government saving schemes that an investor can look forward to in the year 2026:

Scheme Name	Current Interest Rate	Lock-in Period	Min. Investment	Max. Investment
Atal Pension Yojana (APY)	8.00%	Till age 60	₹1,000/year	Varies by pension amount
Post Office Monthly Income Scheme (POMIS)	7.40%	5 years	₹1,000	Varies by account type
Kisan Vikas Patra (KVP)	7.50%	115 months (approx.)	₹1,000	No limit
National Pension Scheme (NPS)	9-15% (market-linked)	Till retirement	₹500/month	No limit
National Savings Certificate (NSC)	7.70%	5 years	₹1,000	No limit
Public Provident Fund (PPF)	7.10%	15 years	₹500/year	₹1.5 lakh/year
Employees' Provident Fund (EPF)	8.25%	Till retirement	Varies	No limit
Senior Citizens Savings Scheme (SCSS)	8.20%	5 years	₹1,000	₹15 lakh
Sukanya Samriddhi Yojana (SSY)	8.20%	Till girl's marriage/21 yrs	₹250/year	₹1.5 lakh/year
Post Office Savings Account (SB)	4.00%	No lock-in	₹500 (varies)	No limit
National Savings Recurring Deposit (RD)	6.70%	Varies (min. 6 months)	₹100/month	No limit
National Savings Time Deposit (TD)	6.90%-7.50% (by tenure)	1-5 years	₹1,000	No limit
Mahila Samman Savings Certificate	7.50%	2 years	₹1,000	₹2 lakh
RBI Floating Rate Saving Bonds	8.05%	7 years	₹1,000	No limit
Municipal Bonds	6-10% (varies)	Varies	Varies	Varies

Scheme Name

Current Interest Rate

Lock-in Period

Min. Investment

Max. Investment

Atal Pension Yojana (APY)

8.00%

Till age 60

₹1,000/year

Varies by pension amount

Post Office Monthly Income Scheme (POMIS)

7.40%

5 years

₹1,000

Varies by account type

Kisan Vikas Patra (KVP)

7.50%

115 months (approx.)

₹1,000

No limit

National Pension Scheme (NPS)

9-15% (market-linked)

Till retirement

₹500/month

No limit

National Savings Certificate (NSC)

7.70%

5 years

₹1,000

No limit

Public Provident Fund (PPF)

7.10%

15 years

₹500/year

₹1.5 lakh/year

Employees' Provident Fund (EPF)

8.25%

Till retirement

Varies

No limit

Senior Citizens Savings Scheme (SCSS)

8.20%

5 years

₹1,000

₹15 lakh

Sukanya Samriddhi Yojana (SSY)

8.20%

Till girl's marriage/21 yrs

₹250/year

₹1.5 lakh/year

Post Office Savings Account (SB)

4.00%

No lock-in

₹500 (varies)

No limit

National Savings Recurring Deposit (RD)

6.70%

Varies (min. 6 months)

₹100/month

No limit

National Savings Time Deposit (TD)

6.90%-7.50% (by tenure)

1-5 years

₹1,000

No limit

Mahila Samman Savings Certificate

7.50%

2 years

₹1,000

₹2 lakh

RBI Floating Rate Saving Bonds

8.05%

7 years

₹1,000

No limit

Municipal Bonds

6-10% (varies)

Varies

*Important Note: Interest rates are subject to change. **yr: year.

Details of the Best Government Schemes to Invest In

Atal Pension Yojana (APY)

The Atal Pension Yojana, launched in 2015, is a government-backed pension scheme which aims to create a social security system, especially for people from poor and underprivileged backgrounds and employees working in the unorganised sector.

Eligibility:
- Beneficiaries: The scheme is specifically designed for people from underprivileged backgrounds and people working in the unorganised sectors.
- Age Criteria: Any person between the ages of 18 and 40 years can contribute
- Tax payer restriction: Any individual who is an income tax payer is ineligible to enrol under this scheme.
Contribution
- Contribution amount: The contribution amount depends on the chosen pension amount. The higher your pension amount, the higher the contribution will have to be made. The prescribed contribution is also calculated based on your age when enrolling under the scheme.
- Contribution period: The contribution period lasts from the day of enrolling in the scheme to the age of 60.
Benefits
- Minimum pension: Individuals enrolled under this scheme can receive a fixed monthly income of ₹1000, ₹2000, ₹3000, ₹ 4000, or ₹5000 depending on what option they have opted for when enrolling for the scheme. The pension is provided to them from the age of 60 till their death.
- Spousal pension: If the subscriber dies, the spouse of the subscriber receives the remaining pension instalments for their remaining life.
- Return of pension wealth: If both the subscriber and spouse die, the total accumulated pension wealth is returned to the nominee.

Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme is a government-backed savings scheme which guarantees monthly income to investors seeking a secure and low-risk financial instrument.

Deposit features:
- Single Deposit: You only have to make a single deposit. No recurring payments are required after the lump sum investment.
- Monthly interest payout: A fixed interest rate is paid to the investor every month from the date of enrolment under the scheme.
- Minimum and maximum deposits: A minimum of ₹1000 is accepted to enrol in the scheme. For a single account, the maximum amount you can deposit is ₹4.5 lakh, while for a joint account, you can deposit up to ₹9lakh.
Eligibility: Should be a citizen of India. Minors aged 10 years or older can also start an account in their name.
Flexibility
Transferability: You can transfer your account to any post office across India
- Premature closure: If the account is closed before 3 years, a deduction of 2% is levied, while a 1% penalty is levied for a closure between 3-5 years
- Pre-mature withdrawal: Allowed after 1 year with a penalty.
Taxation: Interest is taxable, but no TDS is levied for accounts earning interest below ₹10,000 annually.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra is a government-backed small savings scheme which guarantees to double your investment amount in 115 months. It is governed by the Kisan Vikas Patra Rules 2014.

Investment Features
- No Investment Limit: There is no upper limit to the amount you can invest under this scheme
- Maturity and Returns: The maturity period is 9 years and 4 months. The scheme guarantees that the payout is double the amount of investment.
- Types of certificates: There are 3 types of certificates
- Single holder type: Issued to the individual, to an adult for a minor or to a minor
- Joint A type: Issued to two adults and is payable to both
- Joint B type: Issued to two adults but is payable to either of them
Taxation: Interest is taxable, and no TDS is applicable.
Flexibility
- Transferable: Can be transferred from one post office to another.
- Liquidity: Premature withdrawals are allowed after 2.5 years with some penalty.

National Pension Scheme (NPS)

The National Pension Scheme is designed for individuals who wish to develop a sustainable and fixed pension during retirement. It is a government-backed pension scheme best for people looking to have a hassle-free retirement.

Contribution
- Employee contribution: Individuals are mandated to contribute 10% of their salary in the scheme. These are automatically deducted from the salary of the employee.
- Government Matching: The government matches the contribution made by the employee and doubles the monthly contribution.
Investment framework
Asset Classes: Your money is invested in a number of asset classes like government securities, corporate bonds and equities. This is to ensure that your capital can make returns while also avoiding risks.

Investment proportions:

50%	Government Securities
45%	Debt Instruments
15%	Equities
5%	Short-term debt instruments
5%	Asset-backed instruments

Mandatory Annuity: At least 40% of the corpus must be used to buy an annuity at retirement.
Tax Benefits: Deductions under Section 80CCD(1) and 80CCD(2). Additional tax benefits of up to ₹50,000 under Section 80CCD(1B)

National Savings Certificate (NSC)

National Savings Certificate is a savings scheme backed by the Government of India, which is created to facilitate long-term investment.

Eligibility: The individual should be a resident of India. Minors above the age of 10 can also open and operate an NSC account.
Deposit
- Minimum: You can start saving with as little as ₹1000
- Maximum: No maximum limit for the deposits
Interest Rate: Currently at 7.7% per annum, compounded annually.
Flexibility
- Transferability: The account can be transferred from one person to another under specific conditions such as the death of the individual enrolled under the scheme.
- Premature closure: No premature closures are allowed except in extreme circumstances such as the death of the account holder
Tax Benefits: Eligible for deductions under Section 80C up to ₹1.5 lakh.

Public Provident Fund (PPF)

Public Provident Fund is a long-term investment scheme backed by the government which aims at providing retirement security to individuals. PPF provides individuals with fixed and guaranteed returns and can be opened by any individual who is a resident of India.

Interest Rate: Currently 7.1% per annum, compounded annually

Eligibility features
- Eligibility: Any individual can open a PPF account
- One account: One account is permitted per individual. A second account, if opened, is considered irregular and no interest is accrued in it.
- Restrictions: NRIs are not permitted to open a PPF account.
Investment:
- Minimum Investment: You can start with as low as ₹500 per year
- Maximum Investment: The maximum amount you can invest in a year is ₹1.5 lakhs
Maturity and tenure extension: The tenure for a PPF account is 15 years. You can extend the account for a period of 5 years.
Tax Benefits: Contributions are eligible for deductions under Section 80C.
Partial Withdrawal: Permitted after 6 years for specific purposes.

Employees’ Provident Fund (EPF)

The Employees Provident Fund, managed by the Employees Provident Fund Organisation, is a compulsory savings scheme which has been designed to provide a person with long-term financial security for salaried employees in India.

Employer Contribution: The employer contributes an equal share (12%) of your basic salary.
Interest Rate: Currently at 8.15% per annum.
Tax-Free: Interest earned and the corpus are tax-free if withdrawn after 5 years of continuous service.
Compulsory Participation: Mandatory for employees of companies with more than 20 employees.
Loan Facility: EPF allows loans against the corpus for specific purposes like home purchase.
Contributions
- Contributions by the employee: 12% of your monthly wages
- Contributions by the employer: The employer also contributes 12% of your salary.
Interest rate: The rate of interest is declared by EPFO annually and is at 8.25%
Withdrawal
- Retirement: You can make a full withdrawal at the age of 58
- Unemployment: You can withdraw 75% of your fund after one month of unemployment. The remaining can be withdrawn after two months.
- Partial Withdrawal: Partial withdrawals are allowed during service for special needs such as housing, emergencies and other life events like marriage.
Tax Benefits: Interest earned and the corpus are tax-free if withdrawn after 5 years of continuous service.

Senior Citizens Savings Scheme (SCSS)

The Senior Citizens Savings Scheme is a retirement savings scheme curated to provide senior citizens with stable income and financial security during their retirement. It is government-backed and thus guarantees returns to the individual enrolled in the scheme.

Eligibility
- Retired employees: Includes retired civilian employees, defence personnel and spouses of government employees.
- Ineligibility: NRIs and Hindu Undivided Families are not eligible to open this account
Investment limit
- Minimum Deposit: You can start investing with a minimum of ₹1000
- Maximum Deposit: You can invest up to ₹30 lakh in SCSS.
Interest and payout
Interest Rate: Currently 8.20% per annum, paid quarterly.
Payout Frequency: Interest is paid in a quarterly manner on the 1st business day of April, July, October, and January.
Tax benefits: Eligible for tax deductions under Section 80C.
Death of the account holder: In case the account holder dies, the account is closed, and the nominee receives the balance.

Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana (SSY) is a small savings government scheme aimed at securing the future education and marriage expenses of a girl child.

Eligibility features
- Eligibility: A girl child under the age of 10 is eligible for the scheme
- Guardian requirements: the parent of the child can open the account. A family can only open 2 accounts.
Interest Rate: Currently 8.20% per annum, compounded annually.
Tax Benefits: EEE status. Premiums are eligible for deductions accompanied by tax-free maturity and tax-free interest.
Tenure: 21 years or until marriage after the age of 18.
Flexibility
- Partial Withdrawals: Allowed after the girl turns 18 for education.
- Premature Closure: Premature closure is allowed in certain circumstances such as a life-threatening illness or the death of the account holder.

Post Office Savings Account (SB)

The Post Office Savings Account acts like a government-backed savings account which provides you with a secure way to park your money and can also earn interest.

Interest Rate: 4% per annum, compounded quarterly.
Balance limits
- Minimum Balance: ₹500 required to maintain the account.
- Maximum balance: No upper cap to the amount you can deposit
Liquidity: Unlimited withdrawals allowed.
Tax Benefits: Interest earned is eligible for deduction under Section 80TTA (up to ₹10,000).
Safety: Deposits are backed by the government, ensuring complete safety.

National Savings Recurring Deposit (RD)

The National Savings Recurring Deposit allows individuals to invest small amounts regularly, ensuring disciplined savings with fixed returns.

Eligibility: Any resident of India can open an RD account. A child above the age of 10 can open and operate the account.
Deposit
- Minimum: You can start an RD with as little as ₹100 per month
- Maximum: There is no maximum limit of deposit
Returns
- Interest Rate: 6.70% per annum, compounded quarterly.
- Compounding: Interest is compounded in a quarterly manner.
Tenure: 5 years.
Premature Withdrawal: Allowed with penalties after one year.
Taxation: Interest earned is taxable.

National Savings Time Deposit (TD)

National Savings Time Deposit is a fixed deposit scheme offering guaranteed returns for those seeking a safe, long-term investment.

Interest Rate: 6.90% - 7.5% per annum for 1, 2, 3, 5 year terms, compounded quarterly.
Tenure: Available for 1, 2, 3, and 5 years.
Interest Payment: Interest is paid quarterly.
Premature Withdrawal: Allowed with penalties.
Taxation: Interest is taxable, and TDS is applicable if interest exceeds ₹10,000 annually.

RBI Floating Point Saving Bonds

RBI Floating Point Saving Bonds are debt instruments issued by the Reserve Bank of India. They are government-backed and thus act as a safe investment option.

Investment Limit
- Minimum: You can start investing with as low as ₹1000.
- Maximum: There is no upper cap to the amount of money you wish to invest in this instrument.
Floating Interest Rate: The interest rate is revised every six months, currently at 8.05% (as of January 2025).
Tenure: Fixed 7-year maturity period.
Guaranteed Returns: Backed by the Government of India, ensuring safety.
Interest Payout: Paid half-yearly (no cumulative option).
Taxation: Interest earned is taxable as per the investor's income tax slab.

Municipal Bonds

Municipal Bonds are debt securities issued by municipal corporations to fund infrastructure projects, offering returns with relatively low risk.

Interest Rate: Varies between 6-8%, depending on the issuer.
Tenure: Typically 10-15 years.
Tax Benefits: Some municipal bonds may offer tax exemptions under Section 10.
Marketability: These bonds can be traded in secondary markets.
Safe Investment: Lower risk compared to corporate bonds.

Conclusion

There are many other schemes offered by the Government of India to protect the financial future of the residents of the country. Whether you are a young professional starting your career or nearing retirement, there is a government scheme customised to your needs. An investor needs to analyse all the aspects before making any future investment to safeguard the finances of themselves and their family. However, with the rising cost of living and inflation, you might want to consider investing in the best investment plans which provide you with market-linked returns. You can diversify your portfolio accordingly and secure a financially secure future for yourself.

FAQs

Can NRIs invest in government saving schemes?

No, Most government schemes only allow resident Indians to invest in them. You can explore [investment plans for NRIs](https://www.policybazaar.com/life-insurance/investment-plans/nri-investment-plans-in-india/) if you wish to invest in a financial instrument.

How do I choose the best government scheme for myself?

Before choosing the best government scheme for yourself, consider the following factors.

Your Financial goal
The future cost of your goal
The time horizon of investment
Your liquidity requirements
Your age and eligibility for the scheme
Tax benefits

Which government scheme is best for beginners?

Government schemes, with their secure returns and generally good for beginners to invest in. However, as a beginner, you can consider investing in PPF, NSC and post office time deposits as per your financial goal and investment horizon.