THE ESM CORNER

DISCOVER THE BEST SAVING SCHEMES OFFERED BY BANKS

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If you are an Indian Armed Forces Veteran or a future retiree, you deserve to enjoy a secure and comfortable life after your dedicated service to the nation. To help you achieve your financial goals and protect your family’s future, there are various Saving schemes and benefits offered by Banks These include pension schemes, insurance plans, saving accounts, loan facilities, etc. In this section, we will provide you with information and guidance on how to avail of these schemes and benefits, and how to plan your finances effectively. Whether you want to know about Fixed Deposits, Recurring Deposits, Monthly Income Schemes, or Senior Citizen Saving Schemes. We will share insights on all of them. We hope that this section will help you make informed decisions and secure your financial future.

Some of the popular Bank saving schemes are:

Recurring Deposit (RD): This is a Saving scheme where you deposit a fixed amount every month for a specified period and earn interest on it. The interest rate is of RD is higher than a regular savings account. You can choose the tenure and the amount at your convenience. RD is suitable for those who want to save regularly and earn a decent return.

Fixed Deposit (FD): This is a Saving scheme where you deposit a lump sum amount for a fixed period and earn interest on it. The interest rate is usually higher than an RD and depends on the tenure and the amount. You can choose the tenure from 7 days to 10 years and the amount as per your requirement. FD is suitable for those who want to invest a large amount and earn a guaranteed return.

Monthly Income Scheme (MIS): This is a Saving scheme where you deposit a lump sum amount for a fixed period and receive a monthly income on it. The interest rate is usually lower than an FD and depends on the tenure and the amount. You can choose the tenure from 1 year to 5 years and the amount up to Rs. 4.5 lakhs for a single account and Rs. 9 lakhs for a joint account. MIS is suitable for those who want to get a regular income and secure their future.

Senior Citizen Savings Scheme (SCSS): This is a Saving scheme exclusively for senior citizens who are above 60 years of age. The Indian Armed Forces retirees who have attained the age of 50 years and have the Senior citizen certificate issued by the Indian Armed Forces can deposit a lump sum amount up to Rs. 15 lakhs for 5 years and earn interest on it. The interest rate is usually higher than other schemes and is revised quarterly. You can also avail tax benefits under Section 80C of the Income Tax Act. SCSS is suitable for those who want to get a high return and save tax.

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Public Provident Fund (PPF): This is a long-term saving scheme where you can deposit up to Rs. 1.5 lakhs per year for 15 years and earn interest on it. The interest rate is revised quarterly and is usually higher than other schemes. You can also avail tax benefits under Section 80C of the Income Tax Act. A PPF Account can be opened in any post office or bank. PPF is suitable for those who want to save for their retirement or other long-term goals.

Sukanya Samriddhi Yojana (SSY): This is a saving scheme for the girl child where you can open an account in the name of your daughter before she turns 10 years old and deposit up to Rs. 1.5 lakhs per year for 15 years and earn interest on it. The interest rate is revised quarterly and is usually higher than other schemes. You can also avail tax benefits under Section 80C of the Income Tax Act. You can open an SSY account in any bank. SSY is suitable for those who want to save for their daughter’s education or marriage.

National Pension System (NPS): This is a voluntary, defined contribution pension scheme that allows you to save for your retirement. You can choose from different asset classes, such as equity, corporate debt, government securities, and alternative investments. You can also choose from different fund managers and investment options. You can contribute up to Rs. 1.5 lakh per annum and claim a tax deduction under Section 80C of the Income Tax Act. You can also contribute an additional Rs. 50,000 per annum and claim a tax deduction under Section 80CCD(1B) of the Income Tax Act. The returns are market-linked and not guaranteed. The maturity amount is partially taxable and partially.

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Apart from investment options, Banks also offer the following additional services that fulfill your needs and make life easier.

Life insurance: This is a contract that provides financial protection to your dependents in case of your untimely death. You pay a premium to the insurance company, and in return, the company pays a lump sum or periodic payments to your nominees upon your death. Life insurance can also serve as a savings and investment tool, as some policies offer maturity benefits, bonuses, and returns. The premium paid for life insurance is eligible for a tax deduction under Section 80C of the Income Tax Act. The death benefit and the maturity benefit are exempt from tax under Section 10(10D) of the Income Tax Act.

Health insurance: This is a contract that covers your medical expenses in case of any illness or injury. You pay a premium to the insurance company, and in return, the company reimburses your hospitalization bills or pays them directly to the hospital. Health insurance can also offer additional benefits, such as cashless treatment, pre and post-hospitalization expenses, ambulance charges, etc. The premium paid for health insurance is eligible for a tax deduction under Section 80D of the Income Tax Act. The claim amount received from health insurance is exempt from tax.

Home loan: This is a loan that helps you to buy or construct a house. You borrow a certain amount from the bank and repay it in monthly installments along with interest. The interest rate can be fixed or floating, depending on the bank and the loan scheme. The tenure of the loan is usually between 5 to 30 years. The principal amount repaid for a home loan is eligible for a tax deduction under Section 80C of the Income Tax Act. The interest amount paid for a home loan is eligible for a tax deduction under Section 24 of the Income Tax Act, up to Rs. 2 lakh per annum for a self-occupied property and without any limit for a let-out property.

Education loan: This is a loan that helps you to fund your higher education in India or abroad. You borrow a certain amount from the bank and repay it in monthly installments along with interest. The interest rate can vary from bank to bank and depend on the course and the institution. The tenure of the loan can range from 5 to 15 years. The interest amount paid for an education loan is eligible for a tax deduction under Section 80E of the Income Tax Act, without any limit, for a maximum of 8 years.

Personal loan: This is a loan that helps you to meet your personal or professional needs, such as weddings, travel, medical emergencies, etc. You borrow a certain amount from the bank and repay it in monthly installments along with interest. The interest rate can be high, as personal loans are unsecured loans, which means they do not require any collateral or security. The tenure of the loan can range from 1 to 5 years. The interest amount paid for a personal loan is not eligible for any tax deduction.

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 In conclusion, Indian Armed Forces personnel work hard in tough conditions. Despite the challenges, government banks have introduced various financial Saving scheme specifically for them. These plans are designed to offer secure ways to invest, gain tax benefits, and plan for the future. These schemes are a way of saving your hard-earned money. As our servicemen and veterans face difficulties, these plans aim to support their financial stability, ensuring a good and prosperous life after they serve the country.

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