Skip to content

National Savings Scheme – Types, Returns, Benefits 

The National Savings Schemes are one of the best saving schemes if you’re a risk-averse investor trying to diversify your portfolio with fixed-return investments. The National Savings Scheme (NSS) is a tax-saving investment offered by the Indian government that is available at every post office to Indian citizens. Under Section 88 of the Income Tax Act of 1961, the National Savings Scheme (NSS) provides an assured return and tax rebates, similar to how it is in the Tax Free Bonds as they come under Section 10(15)(i) in the Income Tax Act, 1995.  

To avail the benefits of such saving schemes you need to be aware of the National Savings Schemes’ purpose, eligibility requirements, required documentation, and how investing in these schemes can diversify and expand your portfolio. 

What is the National Savings Scheme? 

The National Savings Scheme is a government-controlled savings scheme supervised by the Ministry of Finance and managed by the Department of Posts in India. The main objective of these money-saving schemes in India is to motivate people to save and eventually accumulate large savings.

In addition, the return rates of these saving schemes are monitored frequently and supported by the Indian government, making them safe investment opportunities and the best saving scheme in India. 

Every type of investor is catered for by the National Savings Scheme. Each of these saving schemes has a unique set of qualifications, as well as a range of benefits and features in addition to tax deductions. 

Types Of National Savings Scheme 

Some of the popular types of National Savings Schemes are enlisted below. Read through the blog to know more about them. 

Post Office Savings Scheme 

A Post Office Saving Scheme is one of the most popular and easily accessible savings schemes. The post office national savings scheme lets you open a savings account with the Post Office rather than a bank. On the investment amount, a tax credit of up to Rs. 1,000 is given each fiscal year.

There is no specified maturity period for this programme. The maximum sum that may be held is Rs. 500, as well as the minimum deposit amount. This account now pays an annual interest rate of 4%. Additionally, it may also be opened in a minor’s name who is older than 10. 

Public Provident Fund 

This small savings scheme aids in both the mobilization of small savings and the long-term construction of a solid corpus. Residents of India may open a PPF account with a minimum annual deposit of Rs. 500 at specific financial institutions or a post office. PPF accounts typically have terms of 15 years, though they can be extended by another 5 years. 

In accordance with this national savings scheme, only one account may be opened. The minimum available balance as of the fifth or final day of the month is used to compute the annual compounded rate of returns promised under this plan. Also, during the third and fifth years of an account, people can borrow up to 25% of their deposit. 

Post Office Monthly Saving Scheme 

This small savings scheme is very similar to a bank savings account. Over the course of a five-year period, it delivers a fixed income based on the investor’s entire investment. The annual interest rate is predetermined by the government. 

In an individual account, you can start investing with as little as Rs. 1,500 and go as high as Rs. 4.5 lakh; in a joint account, the total corpus can reach Rs. 9 lakh. In this monthly savings scheme, the interest is paid every month. For retirees and anyone looking for a reliable source of interest income, this is a fantastic investment option, making it one of the best monthly savings schemes. 

There are more national savings schemes available for senior citizens alone. You can read A Brief on the Secure Government Bonds for Senior Citizens to get detailed information about the same. 

Kisan Vikas Patra 

Typically, this is a savings scheme that can be accessed through the issuance of certificates by a post office and contributes to generating substantial profits over the course of the tenure. The scheme was developed to aid in instilling financial discipline in small investors, particularly farmers. Any Indian citizen over the age of 18 who makes an individual or group investment in this National Savings Scheme is eligible to receive benefits. Similar to individuals, trusts may also invest, but not NRIs or HUF. Notably, individuals can also invest on behalf of minors in this savings plan. 

It has a 30-month lock-in term and, under certain conditions, permits early withdrawal. Additionally, the Kisan Vikas Patra can be utilized as security for secured loans from financial organizations. Accessible to farmers and low-income investors, this national savings scheme is one of the best savings schemes. 

Sukanya Samriddhi Yojana Scheme 

The goal of the Sukanya Samriddhi Yojana scheme is to better the lives of young girls. This scheme was created to give every family with a female child an option to save money. The SSY is valid for 21 years from the account’s opening date or until the girl turns 18 and marries, whichever comes first. A Rs. 250 minimum deposit is required to start an account, and the annual investment limit is 1.5 lakh. 

Benefits Of The National Savings Scheme 

Substantial and Reliable Returns 

The interest rate, which is compounded annually, will be announced even before you invest in NSS. The guaranteed fixed returns are safe and free from market risks. Investors that are risk-averse can benefit from this, and the National Savings Scheme promotes increased savings. 

Tax Savings 

Your investments in the National Savings Scheme are eligible for tax exemptions up to a maximum of Rs. 1.50 lakhs, as indicated in section 80 C of the ITA Act 1961. Thus, you not only have the potential for high returns but also tax savings. You must be aware that for the first four years of the NSS investment, the annual interest collected is regarded as reinvested and is not deductible for tax purposes.  

Just like there are various benefits on your savings scheme one can also avail benefits on returns when they invest in tax free bonds, as their returns are exempted under Section 10(15)(I) in the Income Tax Act, 1995.    


These money-saving schemes are supported by the government, thus there is no risk of losing one’s main investment or incurring a loss. This important feature assists both rookie savers and risk-averse investors in saving sensibly without worrying about eroding their savings. 

One can also invest in government bonds for bodies like UP Power Corporation Ltd, Andhra Pradesh Capital Region Development Authority, and more. The returns are safe as they are backed by the government of India.  


National savings schemes can typically be divided into groups based on the types of beneficiaries they are designed for. Consequently, invest wisely and diversify your portfolio by purchasing NSS certificates from the National Savings Scheme. For more such blogs tune into our email newsletter.