Saving Schemes

Saving products are relatively safe in protecting the principal capital and offering a low to a modest return on interest payment. In addition, saving accounts are mostly liquid as a cash withdrawal is easily accessible.

Avoid any such scheme where there is a lock-in period, or returns are subject to market movements, for example, tax saving schemes, equity stocks, equity mutual funds, bonds, debentures, etc.

Types of Saving Products

• Savings account offered by a bank or post office.
• Recurring or Fixed Deposit schemes offered by a bank or post office.
• Money market Mutual Fund Schemes.
• Debt Mutual Fund Schemes.

Regular savings accounts, traditionally called passbook accounts, are ideal if you plan to make frequent deposits and withdrawals. They require little or no minimum balance and allow you to withdraw money on demand. The trade-off for this convenience is that the interest you earn will be low compared with investment plans.