Saving is the conservation of money. For instance, putting money aside in a bank or pension plan. Saving also includes reducing expenditures, such as recurring costs. In terms of personal finance, saving specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is higher.
In economics, personal saving has been defined as personal disposable income minus personal consumption expenditure. In other words, income that is not consumed by immediately buying goods and services is saved. Other kinds of saving can occur, as with corporate retained earnings (profits minus dividend and tax payments) and a government budget surplus.
The financial literacy of an individual today is increasing in terms of different investment or tax savings instruments. The risk taking capacity of people to invest in stock markets and mutual funds is also increasing. Regardless of the presence of alternate investment options, small savings schemes continue to be the preferred choice for a great portion of the investing population. The high safety levels tied with attractive returns make small savings schemes a 'most preferred' proposition for most investors.
For those looking at simple tax saving instruments, small saving schemes continue to be an attractive option. Are you breaking your head over how to reduce the tax burden? Your tax consultant will tell you many ways to do that, but there is always one set of investments, which is a safe way to save on taxes. And if you look at returns it is not a bad investment vehicle either. That is, if you are not too anxious on the liquidity part. We are, of course, talking about small saving schemes which have been time-honoured tax saving vehicles. These investments are also a good way to cover against any future changes in interest rates.
Types of Small saving Schemes Here is a list of some of the best small saving schemes, which are available for you.
· National Savings Certificate
· Post Office Recurring Deposits
· Kisan Vikas Patra
· Public Provident Fund
· Relief Bonds
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