scorecardresearchAs markets turn topsy-turvy, small saving schemes gain significance

As markets turn topsy-turvy, small saving schemes gain significance

Updated: 07 Mar 2022, 04:37 PM IST

When returns on stocks turn from bad to worse, we give the lowdown on some of the popular small saving schemes which offer stable & safe returns

Experts advise to seriously reckon an array of safe, reliable and high-yielding investment options.

Experts advise to seriously reckon an array of safe, reliable and high-yielding investment options.

During volatile times amid geopolitical crisis following Russia’s attack on Ukraine on February 24, investors can discern small saving schemes that offer stable, safe and consistent returns. As markets bleed, further volatility — that could be triggered by the forthcoming Fed Rate hikes — is likely to put further downward pressure on stock prices, believe experts.

Amid all this, it is advised to seriously reckon an array of safe, reliable and high-yielding investment options that are already popular among small investors. 

“In general, markets do not like any form of uncertainty. Any negative news will cause the market to be nervous and create better opportunities. Usually, small investors tend to enter when the market is euphoric and sell when the market is nervous. Therefore, small investors should allocate an investment amount that they can maintain irrespective of the short-term market movements. A combination of large, mid, and small-cap mutual funds or exchange-traded funds meets this objective," says Ankur Kapur, Founder of Plutus Capital.

These are some of the safe investment schemes small investors can explore: 


Kisan Vikas Patra: It is a small savings certificate scheme that helps inculcate long-term financial discipline amongst investors. The tenure of the scheme is 124 months, i.e., 10 years and four months. It offers interest at the rate of 6.9 percent per annum.

Fixed deposits: As banks have been raising interest rates for some time now, FD is also a viable and promising option. Lately, HDFC Bank raised its rates twice, SBI and Canara Bank also raised their interest rates on term deposits. Aside from this, small finance banks and NBFCs tend to offer relatively higher returns on their term deposits vis-à-vis large commercial banks.

So, based on the features of these schemes, one can pick and choose some of these investment options and give a considerable allocation in their portfolios to at least some of these alternatives.

Public Provident Fund (PPF):  It is a long-term fixed-income scheme backed by the government of India. Since it is backed by the government guarantee, it is one of the safest forms of investment offering assured returns. The government determines interest rates every quarter. Needless to mention that it is not linked to any market fluctuations. The current rate is 7.1 percent per annum.

National Savings Certificate (NSC): This is a savings bond scheme initiated by the Government of India that encourages low to middle income investors to invest while offering tax benefit under Section 80C.  

This can be bought by investors for themselves, on behalf of a minor, or in a joint account with another investor from any post office branch on submission of KYC documents (including authorised identification proof and address proof). The rate of interest offered for the five-year NSCs is 6.8 percent per annum. 

Scheme            Return (%) per annum
Kisan Vikas Patra 6.9
5-year NSC     6.8
5-year post office time deposit 6.7
Sukanya Samridhi yojana 7.6


Sukanya Samridhi Yojana: It is a social security scheme that enables parents to provide a girl — ten or younger — with financial stability. Under this scheme, account in the name of a girl can be opened in any private or governmental bank. The investment tenure is 21 years from the opening date of the account.

One can invest a minimum of 1,000 per year and a maximum of 1.5 lakh. These deposits may only be made for the first 15 years after the account is opened. After this, the compound interest is paid in the account. Currently, the return offered on this scheme is 7.6 percent per annum.

First Published: 07 Mar 2022, 04:37 PM IST