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Best saving plan in India as inflation stays above comfort levels



Inflation in India has remained persistently above comfort levels in recent times, impacting the purchasing

power of individuals. In such an economic environment, choosing the best saving plan in India

becomes crucial for safeguarding and growing one’s hard-earned money. With rising prices, traditional

saving methods like fixed deposits or savings accounts may not offer sufficient returns to beat inflation.

Therefore, it is essential to explore financial instruments that provide better inflation-adjusted growth.

Features to look for in the best saving plan in India

When selecting the best saving plan in India during high inflation periods, focus on:

- Returns above inflation: The primary objective is ensuring your capital grows faster than inflation.

- Tax efficiency: Savings that provide tax benefits under sections like 80C or 10(10D) help maximise net gains.

- Liquidity: Easy access to funds without heavy penalties can be beneficial in uncertain times.

- Safety: The plan should offer capital protection, especially for conservative investors.

- Tenure flexibility: Different financial goals require different investment horizons.

Top saving plans that outperform inflation

1. Public Provident Fund (PPF)

PPF remains one of the most popular saving plans backed by the government.

Offering an interest rate that is revised quarterly, it currently stands around 7.1%, typically above inflation.

PPF comes with tax benefits under section 80C, and the accumulated amount is exempt from tax at maturity.

However, the 15-year lock-in period limits liquidity.

2. National Pension System (NPS)

For long-term retirement planning, NPS is a strong candidate.

It combines equity, government bonds, and corporate debt for a diversified approach.

Historically, NPS has delivered average returns of 9-10%, comfortably beating inflation.

Contributions qualify for tax deduction up to Rs. 1.5 lakh plus an additional Rs. 50,000 under section 80CCD(1B).

3. Equity-linked saving scheme (ELSS)

ELSS funds invest predominantly in equity markets, which provide potential for high returns above inflation.

With an average return of 12-15% over the long term, ELSS combines growth with tax savings under section 80C.

It also offers the shortest lock-in period of three years among tax-saving plans.

4. Senior Citizens Saving Scheme (SCSS)

For senior citizens, SCSS offers an attractive interest rate of 8.2%, paid quarterly, usually above inflation rates. It is a safe investment with government backing and tax benefits on investment under section 80C. The tenure is five years with the option to extend by three more years.

Conclusion

With inflation consistently staying above comfort levels, choosing the best saving plan in India

is vital for preserving and growing wealth. Public Provident Fund, National Pension System,

ELSS, and Senior Citizens Saving Scheme offer dependable options that can help investors

outpace inflation while enjoying tax benefits. Assessing one’s financial goals, risk appetite,

and liquidity needs will guide the selection of the most suitable plan.

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