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These 5 Government Schemes Offer Higher Interest Than FD – Crores Have Already Invested, Don’t Miss Out!

If you still think bank FDs (Fixed Deposits) are the safest and most rewarding investment option, it’s time to think again. In recent years, interest rates on FDs have declined, especially after the Reserve Bank of India (RBI) reduced the repo rate. This has directly impacted the returns on bank FDs.

In contrast, several government-backed savings schemes not only offer better interest rates (up to 8.2%), but also provide complete safety and guaranteed returns.

In this article, we’ll explore 5 government saving schemes that offer higher interest rates than bank FDs, are completely secure, and come with tax benefits. These schemes are ideal for investors who want zero risk and fixed returns.

These 5 Government Schemes Offer Higher Interest Than FD – Crores Have Already Invested, Don’t Miss Out!

✅ Why Are Bank FDs Less Attractive Now?

FDs have traditionally been considered a safe investment, but:

  • Repo rate cuts by RBI have led to lower FD interest rates in most banks.

  • Many banks now offer just 5.5% to 6% interest, especially for general citizens.

  • FD interest is fully taxable, reducing your net earnings.

Hence, investors are now exploring safer and more rewarding alternatives in the form of government-backed saving schemes.

🏆 1. Kisan Vikas Patra (KVP)

🔹 Interest Rate: 7.5% annually

🔹 Maturity Period: 115 months (9 years and 7 months)

🔹 Returns: Investment doubles in this duration

Key Features:

  • A safe and government-guaranteed scheme.

  • Fixed return regardless of market fluctuations.

  • Minimum investment: ₹1,000. No upper limit.

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

  • Available at post offices and select banks.

➡ Example: If you invest ₹1 lakh, it will become ₹2 lakh in 115 months.

👧 2. Sukanya Samriddhi Yojana (SSY)

🔹 Interest Rate: 8.2% annually

🔹 Who Can Invest: Parents of girl children below 10 years

🔹 Purpose: For education and marriage of the girl child

Key Features:

  • Minimum deposit: ₹250/year; Maximum: ₹1.5 lakh/year.

  • Entire investment and interest are 100% tax-free.

  • Account matures when the girl turns 21, or on marriage after 18.

  • Can be opened at post offices and authorized banks.

  • One of the highest interest-earning safe schemes available.

➡ Benefit: Secure your daughter’s future with guaranteed, tax-free returns.

💰 3. Post Office Monthly Income Scheme (POMIS)

🔹 Interest Rate: 7.4% (monthly payout)

🔹 Tenure: 5 years

🔹 Returns: Fixed monthly income

Key Features:

  • Ideal for individuals looking for regular monthly income.

  • Minimum investment: ₹1,000.

  • Maximum limit: ₹9 lakh for a single account, ₹15 lakh for a joint account.

  • Government-backed and completely risk-free.

  • Interest is paid monthly, directly to your account.

➡ Example: On ₹9 lakh investment, you get ₹5,550 per month.

🧾 4. National Saving Certificate (NSC)

🔹 Interest Rate: 7.7% (compounded annually)

🔹 Maturity: 5 years

🔹 Investment: Starts from ₹1,000, no upper limit

Key Features:

  • Offers fixed and safe returns.

  • Compounded annually; interest paid on maturity.

  • Eligible for tax deduction under Section 80C up to ₹1.5 lakh.

  • Interest earned is taxable, but no TDS is deducted.

  • Available at post offices.

➡ Example: ₹1 lakh investment gives approx. ₹1.45 lakh after 5 years.

👴 5. Senior Citizen Saving Scheme (SCSS)

🔹 Interest Rate: 8.2% annually

🔹 Eligibility: Individuals aged 60 years or above

🔹 Maturity: 5 years (extendable by 3 years)

Key Features:

  • Designed to offer financial stability post-retirement.

  • Minimum deposit: ₹1,000. Maximum: ₹30 lakh.

  • Quarterly interest payout – credited directly to the bank account.

  • Eligible for tax deduction under Section 80C.

  • One of the most rewarding schemes for senior citizens.

➡ Best suited for: Retired individuals looking for high, regular income.

📊 FD vs Government Schemes – Quick Comparison

Scheme Name Interest Rate Maturity Tax Benefit Special Feature
Bank FD Up to 6% 1–10 years Limited Safe but lower return
Kisan Vikas Patra (KVP) 7.5% 115 months Yes Investment doubles with government backing
Sukanya Samriddhi Yojana (SSY) 8.2% Until age 21 Yes Tax-free returns for girl child’s future
Post Office Monthly Income Scheme 7.4% 5 years Partial Monthly regular income
National Saving Certificate (NSC) 7.7% 5 years Yes Compounded interest, secure investment
Senior Citizen Saving Scheme (SCSS) 8.2% 5 years Yes Best for retirees with quarterly payouts

🧠 Things to Consider Before Investing

  1. Define your financial goal – Education, retirement, monthly income, etc.

  2. Check for tax benefits – Choose schemes that help you save tax under 80C.

  3. Assess liquidity – Some schemes have lock-in periods or early withdrawal penalties.

  4. Understand the risk – These government schemes are low-risk and fixed-return.

  5. Keep documents ready – PAN, Aadhaar, and KYC are mandatory for most schemes.

📌 Conclusion: Choose Smartly and Earn Better Than FDs

Bank FDs may feel safe, but they no longer provide competitive returns. On the other hand, these 5 government-backed schemes offer higher interest, zero risk, fixed returns, and tax advantages. Whether you want to invest for your daughter, retirement, or regular income, there’s a government scheme perfectly suited for your need.

Don’t wait—visit your nearest post office or bank today and take the first step towards smarter, safer, and higher-yielding investments.

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