Small Savings Schemes in 2025: A Foundation, Not the Whole Plan

• Small savings schemes are being re-evaluated by taxpayers due to rising bond yields and bank interest rates.
• PPF offers tax-free returns, making its 7.1% rate comparable to a 9.8-10% taxable FD for high-tax bracket individuals.
• These schemes provide stability and government guarantees, appealing to investors who prioritize safety over market-linked returns.
• Drawbacks include long lock-in periods, limited liquidity, and slow rate adjustments compared to market rates.
• A balanced approach, combining small savings for stability with market-linked investments for growth, is recommended.

Why It Matters: They offer crucial stability and tax benefits for long-term financial planning.