Best Money Saving Plans in India - Savings Options for Financial Growth
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  • Investors

In the world's largest democracy, financial security and wealth-building are aspirations that resonate with people from all walks of life. From busy cities like Mumbai to the peaceful greenery of Kerala, every Indian wants to ensure they have enough money for their present and future.

Moreover, as India's economy keeps changing and offering new opportunities, more ways have presented themselves for people to grow their money. However, this plethora of options can make it difficult to decide and settle on the right one. By familiarising yourself with good avenues for savings, understanding their pros and cons, you can make the best decision for your money.

This blog will take you through the top 10 best money saving plans in India preferred by investors.

Best Savings Plans in India 2023

There are several money-saving plans in India, each tailored to specific financial goals and risk appetites. Some of the best money saving plans include:

1. Fixed Deposits

Fixed deposits, commonly called FDs, are a widely favoured best savings method in India. Fixed Deposits entail depositing a lump sum of money with a bank for a fixed length of time, which might range from a few months to several years. It is the most effective approach to save money while earning interest. In exchange, you will get a set interest rate on your deposit. 


  • Regular payment of the interest
  • Avail of coverage of Rs 5 lakh within 90 days (excluding NBFCs) in case of abrupt closure of the business.
  • Senior citizens can avail of tax exemption up to Rs 50,000 on income earned


  • Interest rates of FDs are variable in nature
  • Penalty on premature withdrawal
  • Lower returns than equities

2. Recurring Deposits

A recurring deposit is one of the best investment plans that is offered by banks and financial institutions. Under this scheme, you need to regularly deposit a fixed amount of money into their account monthly. Over time, these deposits earn interest, providing a convenient and disciplined way for people to save and grow their funds.


  • You can avail loan of up to 90% of your investment
  • You can initiate RD accounts with a monthly contribution as low as ₹100.
  • There is no maximum limit on your number of recurring deposit accounts.


  • After opening an RD account, it is not possible to modify the instalment amount or the duration.
  • Early withdrawal from the account before the tenure is completed will incur a penalty.
  • Missing an instalment can attract penalties.

3. Senior Citizen Savings Scheme

The Senior Citizen Savings Scheme (SCSS) is a financial savings scheme specifically designed for senior citizens in India. The scheme was introduced by the Indian Government in the year 2004 to have a comfortable retirement for people who are aged more than 60 years old.


  • Avail tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
  • You can invest up to ₹30 lakhs in the scheme.
  • Can make pre-withdrawal post-one-year with a complete return of the principal amount.


  • Unclaimed interest income does not earn any additional interest.
  • TDS applies to the interest if the total interest exceeds 50,000 in a year.
  • The benefits of SCSS are exclusively available to individuals aged 60 and above.

4. Mutual Funds

Mutual Funds are investment instruments where the fund manager collects money from other investors to buy a diversified portfolio of stocks, bonds, or other securities. They offer a professionally managed, cost-effective way to access various assets and earn returns.


  • Managed by skilled professionals who have an understanding of them.
  • Highly liquid, allowing you to buy and sell them in the market whenever you want.
  • Lower fund management fees typically range from 1% to 2.50%.


  • Mutual funds are susceptible to market risk and volatility.
  • Exiting a mutual fund may incur exit load fees charged by Asset Management Companies.
  • While diversification helps mitigate the risk of losses, it can also reduce the magnitude of profits.

6. National Savings Certificate - (NSC)

The National Savings Certificate (NSC) is like a savings plan introduced by the government. Under this investment plan, you need to deposit a fixed amount against the bond. You can invest in the scheme at a post office. The scheme is safe and ideal if you want to save money while reducing taxes.


  • Can be used as a loan collateral.
  • Provides tax-exempt off up to ₹1.5 lakh as per Section 80C of the Income Tax Act.
  • Offers flexibility with a minimum investment requirement of 1,000.


  • After investing in the NSC of a specific denomination, you cannot reinvest in the same layer.
  • NSCs are available exclusively to Indian residents.
  • The fixed interest rate can reduce the returns with the rise in the inflation rate.

7. Pradhan Mantri Vaya Vandana Yojana - PMVVY

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme in India primarily designed for senior citizens aged 60 and above. This scheme provides a regular pension income through periodic payouts, ensuring financial security during retirement. PMVVY offers fixed interest rates and is available for ten years.


  • It offers social security to the elderly population of the nation upon retirement.
  • It is administered by LIC, guaranteeing high safety and reliability.
  • It contributes to the expansion of insurance coverage in the economy.


  • A 2% deduction is applied on premature withdrawals from the program.
  • The scheme stopped enrolling new pensioners after March 2023.
  • The scheme lacks provisions for health insurance coverage.

8. Sukanya Samridhi Yojana Account (SSA)

Sukanya Samriddhi Yojana Account (SSA) is a government savings scheme in India specifically crafted to promote the financial well-being of girl children. Parents or guardians can open an SSA account in the name of a girl child below 10, benefiting from attractive interest rates and tax advantages.


  • Provides tax exemption throughout the course of the investment, making it one of the best savings plans.
  • Higher interest as compared to another government saving scheme.
  • Start with an investment of as low as ₹250 in a year.


  • There is a maximum yearly investment limit of ₹1.5 lakhs.
  • Girls who have crossed 10 years of age cannot enroll in the scheme.
  • Only a single account can be opened per girl child.

9. Employees Provident Fund (EPF)

Employees Provident Fund (EPF) is an Indian-mandated savings system in which employers and workers pay a percentage of their income to construct a retirement fund, assuring financial stability after retirement. This savings option is an integral part of the country's social security system.


  • Acts as an emergency fund in time of need.
  • Employee contributions are exempted from taxation under Section 80C of the Income Tax Act.
  • Gave the option of premature withdrawals


  • Being a low-risk instrument, the returns are minimal.
  • Contributions to your EPF account are locked until retirement or when you leave your job.
  • The purchasing power of your EPF savings may diminish over time due to inflation.

10. Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme (MIS) is a trusted financial instrument offered by the Indian postal system. MIS is a straightforward online savings option that provides individuals with a regular and secure income stream.


  • Lower risk as compared to other market instruments.
  • The post office offers a stable interest rate of 7.70% per annum.
  • You get monthly investment returns that
  • are higher than the fixed deposit.


  • No tax exemption under section 80C of the Income tax.
  • The interest, if not withdrawn, does not reap any interest.
  • You can withdraw money before the completion of 5 years.

Also Read- Benefits of Savings Account - Why Is It Important To Have A Savings Account

Key Points to Consider Before Investing in Savings Plans

When investing in savings plans, it is important to choose wisely, as the wrong investment can significantly impact your long-term objectives. Hence, you must consider the following factors:

1. Your Financial Goals

Consider what you are saving for before saving. Is it a new car, a house, or your retirement? Knowing your goals will help you choose the right savings plan.

2. Risk Tolerance

Different savings plans come with different levels of risk. Some are safe but may offer lower returns, while others carry more risk but can earn you more. Decide how much risk you can take.

3. Lock-in Period

Some savings plans have a lock-in period during which you cannot access your funds. If you make a withdrawal, you will have to pay a penalty. Thus, understanding the lock-in period is crucial, especially if you need the funds within a short duration.

4. Costs and Fees

Savings plans often incur fees that can affect your returns. Understanding these costs upfront is crucial, so you only lose what you gain.

When choosing the best saving plans in India to grow your money, there is no one-size-fits-all solution, and this is why you should choose your plan keeping in line with your needs. Additionally, by making informed choices and staying committed to your financial goals, you can take meaningful steps toward securing your financial future in India. 

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.