Saving money might appear like a very boring topic, particularly when you are just beginning your career and want to enjoy life. But what if you could save prudently with zero need for giving up your lifestyle? That is the idea behind beginning with small but saving smartly.
Millennials today are more aware, digitally connected and financially conscious.
But with increasing costs, irregular job and lifestyle spending, zeroing in on the correct savings plan is more important than ever now. If you are in your 20s or 30s, this guide is just right for you. Why may be wonder? It because this guide explores the best saving schemes available in the market today.
Best savings plans for millennials
- Public provident fund (PPF)
PPF is one of the most reliable and government-backed long-term savings schemes in India. It offers tax-free interest and exemption on investment as per Section 80C. With an interest rate equaling 7.1% (subject to revision per quarter), it is best for those looking for stable and risk-free growth.
The lock-in is 15 years but the plan allows partial withdrawals from the 6th year onward. Since the returns are compounded annually and entirely tax-free, it serves as a powerful tool for retirement or long-term wealth creation.
- Recurring deposit (RD)
A recurring deposit is a disciplined way to save a fixed amount monthly and earn decent interest. It’s offered by almost all banks and post offices with tenures ranging from 6 months to 10 years. Interest rates usually fall anywhere between 6% and 8%, depending on the financial institution.
RDs are completely safe and suitable for millennials who want to develop a habit of saving on a regular basis with zero need for exposing their money to market risks. It is easy to open and manage with the option of premature withdrawal (subject to penalty).
- Systematic investment plan (SIP) in mutual funds
SIPs permit investors to contribute small amounts on periodic basis in the selected mutual fund scheme. This makes them best for young professionals. By investing in equity or hybrid mutual funds, millennials can make the most out of the compounding effect and rupee-cost averaging feature.
SIPs even endow flexibility in terms of amount, frequency and withdrawal. While returns are not assured like in government schemes, SIPs have great potential to outperform inflation over the long run, making them a popular savings strategy among India’s new-age investors.
- Sukanya samriddhi yojana (SSY)
This savings scheme is particularly tailored for the benefit of the girl child in India and is backed by the Government of India. Parents or legal guardians of a girl below the age of 10 can open an account under this scheme.
The scheme gives a good interest rate of 8.2% per year along with tax benefits as per Section 80C. The money stays locked in until the girl turns 21 or gets married after 18. It is a great way to save periodically and build a robust fund for her future education or marriage.
- National savings certificate (NSC)
NSC is a fixed-income saving plan offered by the post office and is just right for risk-averse individuals eyeing on assured returns. It comes with a fixed maturity period of five years and earns interest at a competitive rate (7.7% per annum), which is compounded on an annual basis but paid at maturity.
The investment qualifies for tax deduction under Section 80C, although the interest earned is taxable. It is a safe, government-backed plan suitable for medium-term financial goals like education or marriage.
- Employee provident fund (EPF)
EPF is a retirement-focused savings scheme designed for salaried employees, where both employee and employer contribute a portion of the salary (typically 12%) each month. It offers a high-interest rate (currently 8.25%) and is completely risk-free as it is managed by the Employees’
Provident Fund Organisation (EPFO). EPF accounts are portable across jobs and allow partial withdrawals for specific needs like home purchase or medical emergencies. It also comes with tax advantages under the EEE (Exempt-Exempt-Exempt) structure.
- Post office monthly income scheme (POMIS)
POMIS is a low-risk investment option that provides a fixed monthly income, making it suitable for those who want regular returns without market exposure. The scheme has a 5-year lock-in period and offers a steady interest rate (currently around 7.4%), paid out monthly.
Though the interest is taxable, the capital invested remains safe. Millennials supporting families or dependent parents may consider this plan to ensure a supplementary source of income.
- Digital gold or sovereign gold bonds (SGBs)
SGBs are an excellent way for millennials to invest in gold without holding physical metal. Issued by the Reserve Bank of India (RBI), they offer a fixed annual interest (2.5%) in addition to potential appreciation in gold prices.
They come with an 8-year maturity and are tradable on stock exchanges. Unlike physical gold, there are no storage or purity concerns, and capital gains are tax-free if held until maturity. It’s a smart, inflation-hedged savings option for long-term investors.
- Atal pension yojana (APY)
APY is a government-initiated pension savings scheme aimed at unorganised sector workers. Any Indian citizen between 18 to 40 years can contribute a fixed monthly amount and receive a guaranteed pension (ranging from ₹1,000 to ₹5,000/month) after the age of 60.
It ensures financial security in old age and encourages disciplined retirement savings from a young age. Contributions are auto-debited and come with partial tax benefits under Section 80CCD(1B).
10) Fixed deposits with auto sweep feature
Auto sweep FDs are a smart variation of regular fixed deposits offered by many Indian banks. They combine the flexibility of a savings account with the higher interest rates of an FD.
When the balance in a savings account exceeds a predefined limit, the excess is automatically transferred into a fixed deposit. This enables idle funds to earn better returns without compromising on liquidity. It’s ideal for millennials who maintain a balance but want their money to grow passively.
Ending note
Being a millennial means juggling responsibilities, dreams, and rising costs. But savings do not have to be overwhelming. With government-backed schemes like PPF and NSC, flexible tools like SIPs and RDs, and safety nets like EPF and APY — you can start small, grow consistently, and build a secure financial future.
The key is starting today. Pick two–three savings plans that suit your income and goals, automate them, and watch your money grow. Because in the long run, it’s not how much you earn, but how smartly you save that makes all the difference.