Top 9 Best Saving Scheme Options to Grow Your Money in 2025

Nine Best Saving Options in India To Invest In 2025

Saving and investing are critical aspects of financial planning for individuals seeking to secure their future. India offers a wide range of saving and investment options to its citizens, each with its own set of benefits. At the start of 2025, let’s explore the best savings options available to make informed decisions that can help you achieve your financial goals. This article will discuss the nine best savings plans in India that you can consider investing in 2025.

What is a Savings Scheme?

Saving schemes can be defined as monetary tools which can help you achieve your financial goals within a specific time frame. These schemes are introduced by the Government of India in collaboration with banks in India. You can open one with a reputed bank like ICICI Bank and let your money work for you.

The interest rates for these schemes are either fixed by the government or by banks and are revised from time to time. The money saved through these schemes is not just for building wealth but also acts as a financial cover in difficult times. It can be used for emergencies, retirement, higher studies, children’s marriage, education, loan repayments, or even unexpected job loss.

Importance of Saving Schemes in India

Here are the various pointers that will help you understand the importance of investing in some of the popular savings schemes in India:

• In India, savings schemes play a vital role in helping people plan for the future while safeguarding their money

• Many of these schemes are backed by the government, which adds reliability and builds trust. For middle-class families, they encourage regular savings, even in small amounts, enabling gradual wealth creation.

• These schemes also support achieving life goals such as children’s education, marriage, home ownership, or retirement.

• Additionally, tax benefits on certain schemes provide an extra advantage, helping people save more effectively.

Best Investment Options In 2025

Here’s the list of the nine best saving options in India to invest in 2025:

1) Public Provident Fund (PPF)

Due to the Government's guarantee of its returns, this fixed-income programme can be viewed as a risk-free investment. The minimum annual investment is Rs 500 and Rs 1.5 lakh maximum. The current interest rate is 7.10%, with interest rate changes ranging from 0.25% to 0.75%. A PPF fund reaches maturity after 15 years and PPF investments are tax-free. After five years from the date the account was opened, partial withdrawals are permitted.

2) National Savings Certificate (NSC)

The NSC is a fixed-income investment programme. The lock-in period for NSC is five years at a minimum investment of Rs 1,000. After the maturity period, interest is paid. Section 80C of the Income Tax Act, 1961 exempts investments of up to Rs 1.5 lakh per year from your taxable income.

3) Post Office Monthly Income Scheme

The post office monthly income programme is well liked in home settings, particularly among homemakers and anyone wishing to invest passive income to generate extra income. The Indian postal service offers single accounts, joint accounts (up to three people), accounts under the names of minors over 10 years old, guardians or parents of minors and accounts for disordered minds. A minimum deposit of Rs 1,000 is needed to start an account, while Rs 4.50 lakh and Rs 9 lakh are the maximum balances allowed for single and joint accounts. The account may be closed five years after it was first opened. Premature closure is not permitted before a year.

4) Government Bonds

To promote domestic involvement in the sovereign bond market, the Indian Government has made direct bond purchases available to ordinary investors who previously could only trade in Government bonds through gilt mutual funds. On the eve of the auction, the Government makes its bond offering public. When the Government issues bonds, the price is also disclosed. The majority of Government bonds are fixed-rate bonds, meaning the interest rate is set for the duration of the bond until maturity. Depending on the offering, a Government bond's maturity length maybe a year or longer.

5) Sovereign Gold Bonds (SGBs)

The Reserve Bank of India (RBI) is the issuer of SGBs, which are Government securities valued in grams of gold. They have a minimum investment of 1 gram and are issued in grams of gold. Income from Investment is semi-annual payments of 2.5%. The maturity period is eight years. For early redemption, you can withdraw after five years. Interest payments are taxed as per your tax bracket. Gains are not subject to taxes once they are realised.

6) Equity Mutual Funds

A mutual fund that invests in equities on behalf of a group of investors is known as an equity mutual fund. The minimum investment in equity mutual funds is Rs 1,000. Investors in open-ended equity mutual fund schemes are free to redeem their investments. The lock-in period for equity-linked savings plans included in the equity mutual fund category is three years starting from the date of investment. A short-term capital gain is subject to tax at 15% plus a 4% cess. The investment return is entirely tax-free for long-term capital gains if the profits are less than Rs 1 lakh in a fiscal year. Long-term capital gains that exceed Rs 1 lakh are subject to a 10% tax plus a 4% cess.

7) Unit-linked Insurance Plans (ULIPs)

Consumers can receive both investing and insurance benefits from ULIPs. It's easy to understand how ULIPs operate: the policyholder can buy an insurance plan and the money they pay in premiums is split between equity and debt funds with the remaining amount used to provide coverage. Typically, a minimum monthly premium payment of Rs 1,500 is needed. Five years is the "lock-in" period for ULIPs. Using the straightforward equation, NAV = (Value of Current Assets + Value of Investments) - (Value of Current Liabilities and Provisions)/Total Number of Outstanding Units on a specific date, the projected annual rate of return can be computed. Since ULIPs fall under the Exempt, Exempt, Exempt (EEE) category of Section 10 D, they are exempt from tax on the investment, the proceeds, and the withdrawal of funds once the ULIP's five-year lock-in period has ended.

8) Gold Exchange-Traded Funds (ETFs)

Gold ETFs offer the same benefits as purchasing actual gold without the trouble of maintaining physical gold. It is advised to purchase at least one unit, which is equal to one gram of pure gold. The value of your unit will rise in line with the price of gold and vice versa. There is no lock-in period for gold ETFs, so you may sell them whenever you choose. ETFs can be exchanged on stock exchanges, just like an equity mutual fund. As a result, their return is based on the market performance of the gold ETFs. Before the expiration of the 36-month holding period, you must sell your gold ETF. A long-term capital gain tax of 20% + 4% cess is applicable after 36 months.

9) Real Estate Investment Trusts (REITs)

With the help of REITs, investors can purchase units of the company, which work similarly to mutual fund shares and invest in a portfolio of income-producing real estate assets. A minimum investment requirement of Rs 10,000 to Rs 15,000 is required. There is no maturity date for REITs. Taxable income in the form of dividends, rent and interest received by REITs and given to their unit holders are of the same character, i.e., is treated as dividend, rental and interest income, respectively, in the unit holder's hands.

In conclusion, there are numerous best savings plans available in India that offer various benefits and risks. It is essential to analyse your financial goals, risk appetite and investment horizon before making any investment decisions.

FAQs

What Are Monthly Income Savings Schemes?

Monthly income savings schemes are plans where you invest a lump sum amount and receive a fixed monthly income. These are ideal for people seeking regular returns, like retirees. These schemes are safe, reliable, and largely backed by the government or banks.

What Is A Government Savings Scheme?

Government savings schemes are financial plans launched by the Government of India to help people save and grow money. They provide safety, fixed returns, and tax benefits. Examples include Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana. These schemes are very secure.

Is The Interest Rate Fixed For Savings Schemes?

Some savings schemes have fixed interest rates, like PPF or NSC. Others may have variable rates that are revised quarterly by the government. The rates depend on economic conditions. Fixed schemes are more stable, while variable ones can increase or decrease over time.