Forget FDs! These 5 Government Schemes Offer Higher Returns with Zero Risk
Secure your future with smarter, safer investment choices millions already trust
For decades, Fixed Deposits (FDs) have been the go-to investment for Indian households. They are simple, safe, and backed by banks. But times have changed. With falling FD interest rates and rising inflation, the real returns from FDs have taken a serious hit.
Many investors are now looking for better alternatives that offer safety, tax benefits, and higher returns — and the good news is, such options do exist. Several government-backed saving schemes provide more interest than FDs, along with guaranteed returns.
Let’s explore 5 such trusted government schemes that are not only outperforming FDs but are also already being used by crores of Indians.
💡 Why Consider Alternatives to FD?
Here’s why FDs may no longer be your best option:
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Interest rates are as low as 5.5%–6.5%, especially for regular investors.
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FD returns are taxable, reducing your overall profit.
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The interest often doesn’t beat inflation, leading to reduced purchasing power.
🏦 1. Kisan Vikas Patra (KVP)
🔹 Interest Rate: 7.5% annually
🔹 Maturity: 115 months (9 years 7 months)
🔹 Special Feature: Investment doubles automatically
Kisan Vikas Patra is a savings certificate scheme offered by India Post. It is a good option for people who want long-term, risk-free investment with guaranteed doubling of their money.
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Start investing with just ₹1,000
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No upper investment limit
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Available at all post offices
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Backed 100% by the Government of India
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Suitable for people with medium-to-long-term goals
Example: ₹1 lakh invested will automatically become ₹2 lakh in about 9 years and 7 months.
👧 2. Sukanya Samriddhi Yojana (SSY)
🔹 Interest Rate: 8.2% annually
🔹 Who Can Invest: Parents of girl children below 10 years
🔹 Purpose: Girl child’s education and marriage
This is one of the highest interest-paying small saving schemes in India, introduced to promote savings for a girl child’s future.
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Start with just ₹250/year; maximum ₹1.5 lakh/year
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Entire maturity amount and interest are tax-free
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Eligible for Section 80C tax benefits
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Account matures when the girl turns 21 or upon marriage after 18
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Can be opened in post offices or selected public/private banks
Why choose SSY? It's ideal for long-term savings with maximum security, tax savings, and a noble cause.
💰 3. Post Office Monthly Income Scheme (POMIS)
🔹 Interest Rate: 7.4% per annum (monthly payouts)
🔹 Maturity Period: 5 years
🔹 Purpose: Regular monthly income
This scheme is perfect for those who want steady monthly returns without market risks.
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Minimum deposit: ₹1,000
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Maximum for single account: ₹9 lakh; for joint account: ₹15 lakh
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Interest paid monthly, credited to savings account
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Safe and stable income, ideal for retirees or conservative investors
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No TDS deduction
Example: ₹9 lakh investment gives approx. ₹5,550 every month.
🧾 4. National Savings Certificate (NSC)
🔹 Interest Rate: 7.7% annually (compounded but payable at maturity)
🔹 Tenure: 5 years
🔹 Eligibility: Open to all Indian citizens
NSC is a popular fixed-income investment scheme with government backing. It's great for those looking for medium-term investments with tax benefits.
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Start with just ₹1,000; no maximum limit
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Section 80C tax benefit up to ₹1.5 lakh
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Compounded annually, paid on maturity
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Interest is taxable but no TDS
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Can be purchased from any post office
Why choose NSC? Safe, secure, and a good tax-saving investment option.
👴 5. Senior Citizens’ Savings Scheme (SCSS)
🔹 Interest Rate: 8.2% annually
🔹 Eligibility: Citizens aged 60 and above
🔹 Maturity: 5 years (extendable by 3 more years)
This scheme is specially designed for senior citizens, offering one of the highest interest rates among government schemes.
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Minimum investment: ₹1,000
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Maximum limit: ₹30 lakh
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Interest paid quarterly
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Eligible for Section 80C tax benefits
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Available at post offices and authorized banks
Best for: Retired individuals looking for high, steady returns with zero risk.
📊 FD vs Government Schemes: Side-by-Side Comparison
| Scheme | Interest Rate | Maturity | Tax Benefit | Ideal For |
|---|---|---|---|---|
| Bank FD | 5.5%–6.5% | 1–10 years | Limited | Risk-averse investors |
| Kisan Vikas Patra (KVP) | 7.5% | 115 months | Yes (u/s 80C) | Long-term, risk-free doubling |
| Sukanya Samriddhi Yojana | 8.2% | Girl turns 21 | Full EEE | Girl child’s future planning |
| Post Office MIS | 7.4% | 5 years | Partial | Monthly income seekers |
| National Savings Certificate | 7.7% | 5 years | Yes (u/s 80C) | Medium-term, safe investment |
| Senior Citizen Scheme (SCSS) | 8.2% | 5 years | Yes (u/s 80C) | Retirees needing regular income |
🧠 Key Takeaways Before Investing
✅ Decide your financial goals – Retirement, child education, monthly income, etc.
✅ Compare interest and risk – These schemes offer higher returns with no market risk.
✅ Check tax benefits – Maximize your Section 80C benefits wherever possible.
✅ Consider lock-in periods – Some schemes don’t allow early withdrawal.
✅ Complete your KYC – PAN, Aadhaar, and address proof are usually required.
📝 Conclusion: Invest Smartly for Safe and Better Returns
If you're still locking your savings in bank FDs for 6% interest, you're missing out on better, government-guaranteed options. These 5 government schemes offer higher returns, tax benefits, and no market risk, making them ideal for Indian investors of all age groups.
Whether you want to save for your daughter’s education, earn monthly income, or secure your retirement – these plans are tailor-made to suit every life stage.
Act today. Visit your nearest post office or public sector bank, learn more, and start investing in your future — the smart and safe way.
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