Best Saving Plans in India 2025~

Saving money is an important step towards achieving financial independence and security. Whether you're looking to build an emergency fund, save for a specific goal, or plan for retirement, there's a saving plan tailored to your needs. From government-backed schemes offering tax benefits to market-linked options with higher potential returns, we'll explore the best saving plans to help you make informed decisions. If you are planning on investing in a savings plan, here are the top 15 savings plans for 2025 that can help you save for your future financial needs.

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Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

What are Savings Plans?

Savings Plans in India refer to a variety of investment options designed for different financial goals. These plans include Unit Linked Insurance Plans (ULIPs), Public Provident Fund (PPF), National Savings Certificates (NSC), Post Office Monthly Income Scheme (POMIS), Senior Citizens Savings Scheme (SCSS), and others. Each plan offers unique features like tax benefits, interest rates, and maturity periods. Choosing the right savings plan depends on factors such as your risk appetite, investment horizon, and financial goals.

Best Saving Plans in India~

The following are the 15 best savings plans to invest in 2025.

  • National Savings Certificate

  • Senior Citizen Savings Scheme

  • Recurring Deposits

  • Post Office Monthly Income Scheme (MIS)

  • Public Provident Fund (PPF)

  • Kisan Vikas Patra (KVP)

  • Sukanya Samriddhi Yojana (SSY)

  • Atal Pension Yojana

  • Employee Provident Fund (EPF)

  • Pradhan Mantri Jan Dhan Yojana

  • Voluntary Provident Fund (VPF)

  • Nation Pension Scheme (NPS)

  • Unit Linked Insurance Plans (ULIPs)

  • Capital Guarantee Plans

  • Endowment Plans

Savings Plans Current Interest Rate
National Savings Certificate 7.7%
Senior Citizen Savings Scheme 8.2%
Recurring Deposits Varies 
Post Office Monthly Income Scheme (MIS) 7.4%
Public Provident Fund (PPF) 7.1%
Kisan Vikas Patra (KVP) 7.5%
Sukanya Samriddhi Yojana (SSY) 8.2%
Atal Pension Yojana Guaranteed pension amount based on contributions (not a fixed rate)
Employee Provident Fund (EPF) Approximately 8.25% (as of FY 2023-24)
Pradhan Mantri Jan Dhan Yojana Interest rate varies based on bank and account type
Voluntary Provident Fund (VPF) Same as EPF (currently 8.25%)
Nation Pension Scheme (NPS) Varies based on investment options (equity, government securities, corporate bonds)
Unit Linked Insurance Plans (ULIPs) Market-linked, varies based on fund performance
Capital Guarantee Plans Varies
Endowment Plans Varies

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  1. National Savings Certificate (NSC)

    National Savings Certificate (NSC) is a government-backed savings plan with a fixed interest rate and a five-year lock-in period. It is a low-risk investment option that offers tax benefits and is suitable for small to medium-income investors.  

    Features:

    • Government-backed investment, ensuring safety.

    • Fixed interest rate, providing predictable returns.

    • Five-year lock-in period.

    • Tax benefits under Section 80C of the Income Tax Act.

    • Minimum investment amount is Rs. 1000.

    • No maximum investment limit, but tax benefits are capped at Rs. 1.5 lakhs.

    • Available at post offices.

  2. Senior Citizens Savings Scheme (SCSS)

    Senior Citizens Savings Scheme (SCSS) is a government-backed investment scheme specifically designed for individuals aged 60 and above. It offers a higher interest rate than other savings schemes and provides a steady income stream during retirement.

    Features:

    • Open to individuals aged 60 and above.

    • Individuals aged 55-60 can also open an account if they have retired under superannuation, VRS, or special VRS.

    • Higher interest rates compared to other savings schemes.

    • Minimum investment amount is Rs. 1000.

    • Maximum investment amount is Rs. 30 lakhs.

    • Lock-in period of 5 years, extendable by 3 years.

    • Tax benefits under Section 80C of the Income Tax Act.

    • Available at post offices and banks.

    Invest more and Get more with ULIP Plan Invest more and Get more with ULIP Plan

  3. Recurring Deposit (RD)

    Recurring Deposit (RD) is a savings plan offered by banks and post offices that allows you to deposit a fixed amount regularly over a specific period. It is a suitable option for those who want to save systematically and earn interest on their deposits.

    Features:

    • Flexible investment amount, starting from as low as Rs. 100.

    • Flexible tenure, ranging from 6 months to 10 years.

    • Regular savings habit formation.

    • Option for premature withdrawal with penalties.

    • Can be opened individually or jointly.

    • Available at banks and post offices.

  4. Post Office Monthly Income Scheme (MIS)

    A Post Office Monthly Income Scheme (MIS) is a savings scheme offered by the Indian Post Office that provides a regular monthly income to the investor. It is a popular choice for individuals seeking a steady income stream, especially retirees.

    Features:

    • Investors receive a fixed monthly income throughout the investment tenure.

    • The maturity period of an MIS is 5 years.

    • There is a minimum investment amount, and the maximum limit varies.

    • The interest earned on an MIS is taxable.

    • Investors can nominate a beneficiary to receive the proceeds upon their demise.

    • In case of emergencies, investors can avail of a loan against the deposit.

  5. Kisan Vikas Patra (KVP)

    Kisan Vikas Patra (KVP) is a savings scheme offered by the Indian Post Office with a unique feature of doubling the invested amount in a fixed period. It is a long-term investment option.

    Features:

    • The investment doubles in a specified period (currently around 124 months).

    • There is a minimum investment amount.

    • The interest earned on KVP is taxable.

    • Loans cannot be availed against KVP investments.

    • Investors can nominate a beneficiary to receive the proceeds upon their demise.

  6. Public Provident Fund (PPF)

    A Public Provident Fund (PPF) is a long-term investment scheme offered by the Government of India. It is known for its tax benefits and safety.

    Features:

    • Investments in PPF qualify for tax deductions under Section 80C of the Income Tax Act.

    • The maturity period of a PPF account is 15 years.

    • Interest is compounded annually and credited to the account.

    • Investors can avail of a loan against the PPF balance after completing three years.

    • Partial withdrawal is allowed after the completion of five years.

    • The PPF account can be extended in blocks of five years after maturity.

    • Investors can nominate a beneficiary to receive the proceeds upon their demise.

  7. Sukanya Samriddhi Yojana (SSY)

    Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme specifically designed for the future of a girl child. It encourages parents or legal guardians to save for their daughter's education and marriage.

    Features:

    • The account can be opened in the name of a girl child below 10 years of age.

    • The account matures after 21 years from the date of opening.

    • A minimum of Rs. 250 and a maximum of Rs. 1.5 lakh can be deposited annually.

    • The interest rate is declared by the government and is generally higher than other savings schemes.

    • Deposits made under SSY qualify for tax deductions under Section 80C of the Income Tax Act.

    • Partial withdrawal is allowed for the higher education of the girl child.

    • No loan facility is available against the SSY account.

  8. Atal Pension Yojana (APY)

    Atal Pension Yojana (APY) is a government-sponsored pension plan that guarantees a fixed minimum pension on retirement. It is aimed at providing social security to unorganized sector workers and others who are not covered by any statutory pension or retirement benefits.

    Features:

    • Any individual between the age of 18 and 40 years can join APY.

    • Subscribers contribute regularly to the scheme.

    • The pension amount depends on the age of the subscriber at the time of joining and the contribution made.

    • The government provides a subsidy to eligible subscribers.

    • Pension funds regulated by the Pension Fund Regulatory and Development Authority (PFRDA) manage the scheme.

    • Subscribers can transfer their APY account from one pension fund manager to another.

    Invest in high growth ULIP Plans Invest in high growth ULIP Plans

  9. Employee Provident Fund (EPF)

    Employee Provident Fund (EPF) is a mandatory retirement savings plan for employees in the organized sector. Both the employer and employee contribute a fixed percentage of the employee's salary to the EPF account.

    Features:

    • Employees earning above a specified basic salary are eligible to join EPF.

    • Both the employer and employee contribute 12% of the basic salary plus dearness allowance to the EPF account.

    • The interest rate on EPF contributions is determined by the government annually.

    • Members can avail of loans against the accumulated balance in their EPF account.

    • Partial withdrawal is allowed under certain conditions, such as marriage, higher education, house purchase, etc.

    • On retirement, members can withdraw the entire accumulated balance as a lump sum or opt for a pension.

  10. Pradhan Mantri Jan Dhan Yojana (PMJDY)

    Pradhan Mantri Jan Dhan Yojana (PMJDY) is a financial inclusion initiative aimed at providing basic banking services to all residents of India, especially the unbanked and underbanked population.

    Features:

    • The scheme offers a basic savings bank account with no minimum balance requirement.

    • Overdraft facility up to Rs. 10,000 is available after the satisfactory operation of the account for six months.

    • A Rupay debit card is issued to account holders.

    • Accidental insurance cover of Rs. 2 lakh is provided.

    • Life insurance cover of Rs. 30,000 is available.

    • Account holders can access banking services through mobile phones.

    • The scheme can be linked to pension schemes like Atal Pension Yojana (APY).

  11. Voluntary Provident Fund (VPF)

    VPF is a government-backed savings plan that allows employees to voluntarily contribute a portion of their salary, in addition to their mandatory EPF contribution, to build a retirement corpus.

    Features:

    • Employees can contribute any amount above the mandatory 12% EPF contribution.

    • Contributions to VPF qualify for tax deductions under Section 80C of the Income Tax Act.

    • VPF offers a relatively higher interest rate compared to other savings options.

    • The amount invested in VPF is locked in for a minimum of 5 years.

    • In case of emergencies, you can avail a loan against your VPF balance.

    • You can nominate a beneficiary to receive the VPF amount in case of unfortunate events.

  12. National Pension Scheme (NPS)

    NPS is a voluntary, long-term retirement savings plan offered by the Government of India. It allows individuals to invest a portion of their income towards building a pension corpus.

    Features:

    • NPS offers two tiers - Tier I (non-withdrawal) and Tier II (withdrawal allowed).

    • You can choose from various investment options, including equity, government securities, and corporate bonds.

    • Contributions to Tier I accounts qualify for tax deductions under Section 80C and 80CCD(1B).

    • Your NPS account can be transferred across different employers and locations.

    • You can withdraw a portion of your Tier II account balance for specific needs.

    • At retirement, a part of your corpus is used to purchase an annuity, providing regular pension income.

    • Returns in NPS are market-linked, offering the potential for higher returns compared to traditional savings schemes.

  13. Unit Linked Insurance Plans (ULIPs)

    ULIP is a financial product that combines life insurance coverage with investment options. A portion of your premium goes towards life insurance, while the rest is invested in various market-linked funds.

    Features:

    • Provides both life cover and investment growth potential.

    • Offers options to choose from equity, debt, or balanced funds based on your risk appetite.

    • Premiums paid towards ULIPs can be claimed as tax deductions under Section 80C of the Income Tax Act.

    • Allows you to switch between different fund options to align with market conditions.

    • Some ULIPs permit partial withdrawals after a specific lock-in period.

    • You can increase your investment by making additional premium payments.

    • Typically recommended for investment horizons of 5-10 years or more.

  14. Capital Guarantee Plans

    A Capital Guarantee Plan is a life insurance product that ensures the guaranteed return of your invested capital, along with potential additional returns.

    Features:

    • Guaranteed Capital: Your initial investment is protected and returned at maturity.

    • Potential Returns: Offers the opportunity to earn additional returns based on the performance of the underlying investments.

    • Life Coverage: Provides life insurance protection during the policy term.

    • Lower Risk: Generally considered less risky compared to ULIPs due to the capital guarantee.

    • Lower Returns: Typically offer lower potential returns compared to ULIPs.

    • Limited Investment Options: Investment choices are usually restricted.

  15. Endowment Plans

    An Endowment Plan is a life insurance policy that combines life coverage with savings. It pays a lump sum amount at the end of the policy term if you survive or a death benefit to your nominees if you pass away during the policy term.

    Features:

    • Life Coverage: Provides financial security for your family in case of untimely demise.

    • Savings Component: Builds a corpus over time through regular premium payments.

    • Maturity Benefit: Pays a lump sum amount at the end of the policy term.

    • Tax Benefits: Premiums paid towards endowment plans can be claimed as tax deductions under Section 80C.

    • Guaranteed Returns: Offers guaranteed returns, but they are generally lower than market-linked options.

Why Should You Choose a Savings Plan?

Savings plans offer a structured approach to building wealth and achieving financial goals. Here's why you should consider one:

  • Financial Security: Savings plans provide a safety net for unexpected expenses like medical emergencies or job loss.

  • Long-Term Goals: They help you save systematically for significant milestones such as buying a house, children's education, or retirement.

  • Tax Benefits: Many savings plans offer tax deductions on premiums, helping you save on taxes.

  • Life Coverage: Some plans, like ULIPs and Endowment plans, provide life insurance coverage, protecting your family financially.

  • Disciplined Saving: Regular contributions to a savings plan encourage disciplined saving habits.

  • Potential Returns: While not guaranteed, many savings plans offer the potential for growth through investment options.

  • Peace of Mind: Knowing you have a financial cushion can reduce stress and anxiety.

Conclusion

Choosing the best savings plan in India is a crucial decision that depends on your individual financial goals, risk tolerance, and investment horizon. It's essential to conduct thorough research or seek advice from a financial advisor to understand each plan. By carefully evaluating your financial situation and aspirations, you can select a savings plan that aligns with your long-term objectives and helps you build a secure financial future. Remember, early and consistent investing is key to maximizing the benefits of any savings plan.

FAQs

  • What are small saving schemes?

    Small saving schemes are investment plans introduced by the Government of India (GOI) to encourage savings and provide a means for small savers to grow their money. These schemes are typically available at all Post Office branches and nationalized banks, and they generally do not deduct TDS on invested funds.

  • Which saving scheme is best for senior citizens?~

    The Senior Citizen Savings Scheme (SCSS) and Public Provident Fund (PPF) are considered among the top saving schemes for investors aged 60 and above. SCSS allows retirees aged 55 and above to invest their retirement benefits up to Rs. 15 lakhs in a lump sum. Both schemes offer secure returns on investments and tax benefits on the invested amount.

  • What are the eligibility criteria to open a PPF account?

    Any Indian resident who is over 18 years old can open a PPF account. There is no upper age limit, which means even senior citizens can invest in PPF.

  • Can NSC be transferred?

    Yes, most savings schemes, including National Savings Certificates (NSC), are transferable. You can transfer your NSC account from your current bank to any other bank or post office across India. However, you cannot transfer the account once it has matured.

  • Is the interest on NSC taxable?

    Yes, the interest earned on NSC is taxable. Your investment in NSC qualifies for deduction under Section 80C of the Income Tax Act. The interest accrued each year is reinvested and is considered as Income from Other Sources, thus it is taxable.

  • What is an Employee Saving Plan?

    An Employee Saving Plan is a benefit offered by employers to their employees, allowing them to invest a portion of their income towards their short-term and long-term financial goals.

  • What is the interest rate of PPF?

    The Ministry of Finance announces the interest rate on PPF quarterly. From 01.01.2024​, interest rate is 7.1 % per annum (compounded yearly).

  • Is the interest rate fixed for saving schemes?

    No, the interest rates for these schemes can vary over time. Typically, the government revises the interest rates every 3 to 6 months.

˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

Past 10 Years' annualised returns as on 01-05-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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