Some Famous 2023 Government Schemes and Benefits of Investing in it

When it comes to investing, individuals often seek secure and reliable avenues that offer stability and potential growth. In this pursuit, 2023 government schemes emerge as attractive choices due to their inherent stability and backing by the government. These investment avenues provide individuals with a sense of security and confidence, making them an appealing option for those looking to protect and grow their wealth. In this blog post, we will explore some popular government-backed investment options and highlight their benefits and considerations.

Benefits of Investing in Government Schemes

Investing in government schemes offers several benefits, contributing to their popularity among investors.

Here are some key advantages of investing in such options:

• Social-Economic benefits: Each government investment option is related to some social benefits; be it pension, social security, infrastructure financing, and forex reserves. Investing in these schemes is not only beneficial for investors but also plays a greater role in nation-building.
• Safe and Secure Returns: As this scheme is government-backed, returns have assured this scheme, and their interest is reviewed annually. Being backed by the government it provides a safeguard against default as most of them have pre-determined maturity amount and time, making it trustworthy.
• Diversification: Diversification is a key resource in portfolio construction, this practice helps investors tranquility against market volatility and provides the portfolio a safety net.
• Accessibility and Flexibility: They may have lower investment thresholds, making them suitable for a wide range of investors, including those with smaller savings Additionally, some options offer flexibility in terms of investment amounts, periodicity of contributions, and premature withdrawal, providing individuals with greater control over their investments.
• Tax Benefits: These benefits may include tax deductions on the invested amount, tax-free interest, or tax exemptions on capital gains. Utilizing these tax advantages can enhance overall investment returns and contribute to long-term wealth accumulation.

Some Famous 2023 Government Schemes

• Pradhan Mantri Vaya Vandana Yojana (PMVVY) 

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-backed pension scheme that is designed to provide a guaranteed pension to senior citizens after retirement. The scheme is open to senior citizens between the ages of 60 and 80 years. The minimum investment amount to the PMVVY is INR 1,000 and the maximum investment amount is INR 15 lakh. The PMVVY offers a guaranteed pension of 7.4% p.a. The scheme has a lock-in period of 3 years.

Type: Pension Scheme

Tax Benefits: Benefits under 80CCD

Interest Rate: 8.65%

Eligibility: 18-40 years, 20 years of minimum contribution

Investment Amount: Rs. 42 to Rs. 1,454 per month

Lock-in period: Unitil 60 Years

• Atal Pension Yojana

The Atal Pension Yojana is a simple and effective government scheme that provides social security to millions of workers in the unorganized sector. The scheme offers a guaranteed minimum pension, affordable contributions, and tax benefits, making it an attractive option for individuals wishing to secure their financial future during retirement. With the growing awareness about the importance of financial planning and retirement, the scheme is likely to attract more subscribers in the future.

Type: Pension Scheme

Tax Benefits: Benefits under 80C

Interest Rate: 7.40%

Eligibility: The contributor’s minimum age should be 60 years

Investment Amount: Rs. 12,000 - 15,00,000/ annum

Lock-in period: 10 years from the date

• Pradhan Mantri Jan Arogya Yojana

Health treatment should be accessible to everyone, but treatment costs are inflating at a rate of 14% per annum, which is highest among Asian countries, and 93.2% of Indians being employed in the unorganized sector can not afford health insurance. PMJAY, a government scheme comes in as a savior for them, providing ₹5 lakhs per family per year for ₹500 per year.

Type: Health Insurance

Cashless Treatment payment

Coverage of Rs 5 lakh per annum

Eligibility: Socially and economically deprived

Investment Amount: Rs. 500/ annum

Lock-in period: None

• Kisan Vikash Patra

Kisan Vikas Patra (KVP) is a savings scheme introduced by the Government of India. It encourages long-term savings among individuals, especially in rural areas. You can invest a minimum amount (e.g., Rs. 1,000) for a fixed period. The investment doubles after a specified period, and the interest rate is set

by the government. KVP is transferable, considered secure, and the interest earned is taxable. It is advisable to check the latest rules and regulations before investing.

Type: Pension Scheme

Tax Benefits: Benefits under 80C

Interest Rate: 8.65%

Eligibility: 18-65 years

Investment Amount: Rs. 42 to Rs. 1,454 per month

Lock-in period: Unitil 60 Years

• Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana was developed under the government’s ‘Beti Bachao, Beti Padhao’ initiative, it is a welfare scheme designed for the girl child. Investing in this child insurance plan allows their parents or legal guardians to ensure financial security for a girl child aged ten years or below. Under this government scheme, an account in the name of the girl can be opened across any private and public sector banks for 21 years. The tenure of investment under the SSY scheme is 21 years, starting from the account’s opening date.

Type: Future Fund

Tax Benefits: Benefits under 80CCD

Interest Rate: 8.00%

Eligibility: Maximum age of the child should be 10 years at the seed investment

Investment Amount: Rs. 50 per month and can be increased in multiples of 50

Lock-in period: Until beneficiary turns 21 years old

Conclusion

Investing in government-backed schemes offers numerous benefits that make them appealing to individuals looking for secure and reliable avenues for wealth protection and growth. These schemes provide social-economic benefits, ensuring stability and growth for both investors and the nation. They offer safe and secure returns, backed by the government's guarantee, which provides investors with a sense of trust and confidence. Diversification is facilitated through these schemes, mitigating market volatility and offering a safety net for investors' portfolios. Moreover, government schemes are accessible and flexible, accommodating a wide range of investors and allowing greater control over investments. The tax benefits associated with these schemes further enhance investment returns and contribute to long-term wealth accumulation.

It is important to consider the eligibility criteria, investment amounts, lock-in periods, and tax benefits associated with each scheme before making investment decisions.

Visit Daulat’s blogs for a more detailed explanation of this scheme.

Overall, government-backed investment options offer stability, security, and potential growth, making them attractive choices for individuals seeking reliable avenues to protect and grow their wealth.

A blog by Daulat: Daulat is a tech-enabled all-in-one wealth management platform, that provides investors with customized portfolio solutions, to invest better and reach their financial goals. Daulat is led by Varun Fatehpuria who is a NiSM Certified (Series X-A & X-B) financial advisor who has previously worked with Blackstone and Bloomberg in their Hong Kong office.