Since the UPI has been introduced, I barely carry a wallet, let alone cash when I go out. It has quickly become one of the most used conveniences. I’m sure it’s the same with you lot as well.
While the government may have its ups and downs, it has come up with a few schemes that we should engage with and if possible, disseminate to people who don’t have the same privilege as us.
There are many that help the unbanked and the under-banked. The degree of financial inclusion through them has been wide-spread and is something we should be proud of.
PS: Listen their names are difficult to remember, and the abbreviations confuse me even more. So I’ve just added a phrase before the actual schemes names so you can remember them a little better. For example, the Zero Balance Savings Account is a made-up name, the actual name is Pradhan Mantri Jan Dhan Yojana OR PMJDY (even worse)… cool? Ok. Let’s dive into some of them.
Saving Accounts and deposits:
- Zero Balance Savings Account OR Pradhan Mantri Jan Dhan Yojana –
What is it? – The most important scheme is that which helps the unbanked open a zero-balance bank account. The account is called a Jan Dhan Account.
What can you do? – Check with people around you and see if you know anyone who does not have access to a bank account. This will be a godsend for them. There are a lot of private and public banks that support the opening of a Jan Dhan account. It can be opened with or without an Aadhar card (easier if there is an Aadhar though).
Couple of advantages of opening a Jan Dhan bank account –- Even though the Jan Dhan is a separate type of account, the account will still receive the same amount of savings interest rate.
- Encourages people to use the digital banking service.
Read more about this here – https://www.pmjdy.gov.in/about
How many accounts have been opened using this thing? – As of Mar 2021, its around 42.2 Crore accounts.
How are women doing here? – Around 55% of the Jan Dhan Accounts have been opened by women!- Post Office Recurring Deposit a.k.a National Savings Certificate – Another initiative by the government to encourage low/middle-income earners to invest their money and save tax as well. This is a deposit type thing available in a Post Office and has a lock-in period of 5 years at 6.8% p.a. Even though you can claim this for tax purposes under 80C, the return is NOT tax exempt.
- Double-your-money Fixed Deposit a.k.a Kisan Vikas Patra – Would you like to double your money in roughly 10 years and 4 months? That’s exactly what the Kisan Vikas Patra achieves. This is not a month-on-month scheme but a lump-sum investment. This is NOT tax exempt.
Details of all the post office savings schemes are available here – https://www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx
BREAK time. I can’t or shouldn’t keep suggesting my readers to drink beer, maybe grab a crispy coffee? Think about who all can benefit from the above plans and come back to this post.
Insurance Schemes:
- Affordable Life Insurance Cover a.k.a Pradhan Mantri Jeevan Jyoti Bima Yojana – What is this? – This is basically a life insurance scheme for which you need to pay Rs.436 every year. The life insurance cover is for 2L. This is a term insurance plan, meaning you will not receive your premium back or a sum assured if you outlive the term plan.
What can you do? – I have enrolled into this because I found it to be very reasonable and wanted to check out how difficult/easy the process is. If you have access to internet banking, this should take you less than 30 min to setup. There is an auto-debit feature, so just make sure you/ whoever you’re helping has that 436 in their bank account at the time of debit.
Read more about it here – https://jansuraksha.gov.in/Files/PMJJBY/English/Rules.pdf
How many have enrolled in this? – Cumulative count is around 13.11 Crore as of April 2022. - Affordable Accident Insurance Cover a.k.a Pradhan Mantri Suraksha Bima Yojana – This is an accident insurance scheme which will cover both death and permanent disability. The cover for death is 2L, the disability cover is either 1 or 2L depending on the type of disability. The premium for this is Rs.20 per year. Another great incentive that people around you should really be using. There are a lot of families that will benefit from such a scheme.
Read more about it here – https://www.jansuraksha.gov.in/Files/PMSBY/ENGLISH/FAQ.pdf
How many have enrolled in this? – Cumulative count is around 29.01 Crore as of April 2022.
More data on the insurance scheme’s reach available here – https://financialservices.gov.in/sites/default/files/Social Security Schemes June_22.pdf
Yet another BREAK. This is soooo dry people. Look at the picture below to cleanse your eyes and then we’ll get into the next topic.
Pension/Retirement Schemes:
- National Pension System –
What is this? – God this is slightly complex, but let me give it a whirl. This is a way to invest in the market without paying taxes? Not only can you use it for your 80C contribution, the return on the NPS investment is tax exempt as well.
What can you do? – So you can contribute a minimum of Rs.500/month or Rs.1000/annum
Where is my money invested? – this amount can be invested in four different asset classes, namely Equity (max of 75%), Corporate bonds, Government bonds and Alternative Assets like REIT
(What is an REIT!! – Think of it as owning real estate without having the headache of managing and maintaining it).
So the amount invested in each of these asset classes can be chosen by you (Active) or it can be allocated automatically (Auto). Thats all I want to talk about with respect to this. Its really useful, use it if you think it fits you.
Read more about it here – https://npstrust.org.in/content/what-nps - National Social Security System a.k.a Atal Pension Yojana – Would you like to get a regular income of 1000/2000/3000/4000/5000 after you’ve turned 60? This may not seem like a big amount given your age and inflation, but any income during your retirement should always be welcome. You need to pay a certain amount every month for twenty years. The amount you pay will depend on your age and the regular income you want after you turn 60.
Where is my money invested? – The Atal Pension Yojana is invested in different types of asset classes much like the NPS – Government Securities, Term Deposits of Banks and Debt securities, equity and equity related instruments, asset backed securities and money market instruments.
Read more about it here – Atal Pension Yojana FAQ - Public Provident Fund –
I have spoken a lot about this and much more right here – The DREADED PROVIDENT FUNDS. But this is something you should totally capitalize on, anyone can open this, simply through a bank account. Yes, the lock-in period is 15 years, but this a corpus that will grow at a guaranteed and assured rate of 7.1 % (for now).
Should you be taking ANOTHER break now? Go go go! and come back soon!
Schemes for Senior Citizens:
- Social Security for Senior Citizens a.k.a Pradhan Mantri Vaya Vandana Yojana – This is quite the pension scheme for senior citizens looking to get a regular income. Its an insurance + pension plan, in collaboration with the Life Insurance Corporation of India.
So how does this work? You put in anywhere between 1.5L and 15L as a one-time investment. Then the interest is calculated depending on how you want the money to be paid out – monthly, quarterly or yearly. But it’s somewhere around 7.4% – which is GREAT. This is a guaranteed amount you will get.
For example, you put in a one-time investment of 15L and you want a monthly pay-out for the next ten years. The interest is calculated at 7.4% and you end up getting Rs.9250/month for the next ten years irrespective of market conditions. And post the 10 year period, you get your 15 Lakhs back! This is only for people above the age of 60 years. This is NOT tax exempt.
Read more about this here – https://financialservices.gov.in/insurance-divisions/Government-Sponsored-Socially-Oriented-Insurance-Schemes/Pradhan-Mantri-Vaya-Vandana-Yojana(PMVVY) - Senior Citizens Savings Scheme – Similar to the above PMVVY plan, this one also accepts a one-time payment, which can be in multiples of Rs.1000 extending upto a maximum limit of 15L. The interest rate here is also 7.4% which is greater than the FD interest rates being offered by most banks. The only difference here between this and the PMVVY scheme is that this is for a period of 5 years and can be extended for three years post that. This can be availed at many public/private banks as well. Also, this can be used to exempt tax under 80C. The interest is paid out for this quarterly.
Read more about this here – https://www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=62
Schemes for Children:
- Fund for a Girl Child’s future a.k.a Sukanya Samriddhi Yojana – This scheme is one of my favourites. It shows that India is taking the right step in the direction toward woman empowerment and fiscal security. So you can invest in this if you have a girl child below the age of 10. The annual amount for this ranges from Rs.250 to Rs.1.5 L and it also falls under 80 C which is quite nice.
The amount can be withdrawn fully only after the girl child attains the age of 21 or partially (~50%) when she turns 18. The interest rate for this is guaranteed at 7.6% which is awesome. BTW only one account can be opened per child and two accounts can be opened per family.
Read more about it here- https://www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=89
The Money Wellness Studio 
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