How to Save Money from Salary Every Month?

Written by : Knowledge Centre Team

2025-12-24

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It is needless to say that saving money is essential. While some may be fortunate enough to earn an amount that covers their expenses easily, many have to cut down their wishlist after barely covering the monthly expenses. The habit of saving will take years for you to build. However, the sooner you start, the better it is.

A lot of people do not save money as they feel that they do not earn enough to save and splurge at the same time. But if you manage your money in the right way, you can end up saving a lot in the long run, even if you start small. Remember, every time you put some money away, you are helping your future self.

Some people may relate saving money to cutting down on unnecessary expenses, while others might say that it’s a combination of both – cutting down on unnecessary costs and money management. Whether you choose a savings plan to put aside your money or you decide to go ahead with systematic investment plans, never put all your eggs in one basket. Draft a mixture of savings pots to get maximum benefits out of the invested money.

Looking for ways to save your salary every month? Here are 10 practical options to help you build long-term financial security.

Key Takeaways

You can save effectively every month with non-market-linked options like RDs, POMIS, and PPF.
Government-backed schemes like SCSS, PMVVY, and SSY offer stable returns and long-term financial security.
Saving plans help you grow your money while offering life cover, tax benefits, and flexible tenures.
Starting early and diversifying your savings is key to building a strong financial safety net over time.
Even small, regular contributions can grow into substantial savings when managed with discipline and consistency..

How to Save a Portion of Your Salary Every Month: 10 Smart Methods

You can choose to invest in monthly income schemes to save money. There are several other ways to invest your hard-earned money to secure your future. Here are 10 smart ways to save money:

1. Recurring Deposits (RDs)

Recurring deposits are ideal for salaried individuals who want to build savings steadily without market exposure. You deposit a fixed amount every month for a pre-defined tenure, and earn interest at a fixed rate, similar to fixed deposits. Once the tenure ends, you receive the lump sum along with accumulated interest.

RDs are offered by banks and post offices, and are perfect for short- to medium-term goals like buying gadgets, funding travel, or building an emergency fund.

2. Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme is a reliable option for individuals seeking a fixed monthly income from their savings. With an investment limit of ₹9 lakh for individuals and ₹15 lakh for joint accounts, the scheme currently offers attractive interest rates (reviewed periodically by the government).

The tenure is five years, and interest is paid monthly, making it ideal for retirees, homemakers, or anyone looking to supplement their income with zero market risk.

3. Sukanya Samriddhi Yojana (SSY)

If you have a daughter below 10 years of age, the Sukanya Samriddhi Yojana is one of the best government schemes available. You can invest up to ₹1.5 lakh per year, with tax benefits under Section 80C. The interest rate is higher than most other small savings schemes, and the maturity amount is fully tax-free.

SSY encourages disciplined, long-term savings and ensures financial security for a girl child’s education or marriage expenses.

4. National Pension System (NPS)

This scheme is best for people looking for better returns after retirement via a disciplined, long-term savings method by the Pension Fund Regulatory and Development Authority (PFRDA). This long-term retirement plan requires aminimum annual contribution of ₹1,000 to keep the NPS Tier-1 accounts active.

If a person is looking for a systematic savings scheme to save while they earn, they can opt for an NPS. You can ensure a regular income after your retirement by investing in this scheme. The best advantage of NPS is low investment cost.

5. Bank Fixed Deposit

This is one of the safest investments that most people choose. The returns are guaranteed with good interest over specific periods. There are several options available, and you can choose the ones which will suit you the best in the coming years. The interest given upon the principal amount is taxable, but you can spread the investment over monthly income and bank FDs to ensure the lowest tax liability.

6. Public Provident Fund (PPF)

For tax-free returns, you can turn to the Public Provident Fund (PPF). The tax-free interest is considered the best advantage, along with long fixed periods. Getting returns that are not taxable is the best thing that you can expect when you are investing.

If you're investing your money in the hope of saving and getting good returns, then PPF might be the best option for you. PPF is also safer than most of the other investments, as decreed by the sovereign. The zero-risk feature and no tax liability make it the best savings plan for most people.

7. Senior Citizens' Saving Scheme (SCSS)

As the name itself suggests, this scheme is available only to the senior citizens of India. Those above the age of 60 can invest in this scheme. You can apply for this scheme from a post office or a bank to avail of its benefits.

SCSS has a fixed term of 5 years that will be extended by three more years after the scheme matures. The maximum investment limit is ₹15 lakhs. The interest rate, paid quarterly, is taxable. The interest rate will remain constant once the investment is made till the scheme matures.

8. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

This applies to people aged above 60 years. It offers a fixed monthly income after retirement. You can choose to get the returns monthly, quarterly, half-yearly, or yearly. The maximum amount a person can get each month is ₹ 9,250. The upper investment limit in this scheme is ₹15 lakhs. Upon maturity, the invested amount is returned to the investor.

9. Real Estate

Buying properties is a great way of securing funds and investing your money. It is probably the most popular among people who can afford to channel their money into real estate to boost their savings and investments. Several factors play an important role in determining the value of your property, including the location and resources surrounding the property.

You can sell it at a good price or rent it out to ensure a steady monthly income as well. There are no fixed terms in real estate investment. You can sell or lease the property to generate a significant amount of cash whenever required.

10. Saving Plans

Saving plans are designed to encourage savings and investments. There is a wide variety of savings plans that you can invest in to secure your future, including guaranteed return plans, endowment plans, and unit-linked insurance plans (ULIPs)

These plans allow you to build long-term wealth while offering benefits like life cover, flexible tenures, and tax savings under Section 80C. You can select a plan based on your income level, financial goals, and risk appetite. Some savings plans also offer partial withdrawal and maturity benefits, making them ideal for both protection and financial growth.

Did You Know?

Many term policies are also “convertible,” as they can be converted into a permanent life insurance policy.

Investopedia

Closing Lines

Saving up as you earn is essential to build a financial safety net for you and your family when you are no longer earning. Investing a part of your earnings into some of the best investment plans can be a great use of money. Not only will it build a great future, but also make you financially disciplined and help you meet your life goals.

Moreover, diversifying your savings across low-risk and high-return options ensures that your investments are protected against market fluctuations while still offering growth potential. Whether you are saving for a short-term goal, like a major purchase, or planning for long-term needs such as retirement or your child’s education, consistent saving habits combined with the right financial tools can help you stay prepared for every stage of life.

To help you in this journey, Canara HSBC Life Insurance offers a range of savings and investment plans tailored to different life stages and financial goals. With features like guaranteed returns, life cover, tax benefits, and long-term bonuses, these plans are designed to balance safety, flexibility, and growth potential.

So, wait no more! Start early, review your goals regularly, and adjust your investment mix as your financial situation evolves.

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Glossary

Sum Assured: The guaranteed amount paid to the nominee in case of the policyholder’s demise.
Rider: An additional benefit that enhances a term insurance plan, like critical illness coverage.
Term Insurance: Term insurance is a type of life insurance that offers financial protection for a set period.
Mutual fund: A mutual fund is a pool of money that is invested in stocks, bonds, and other securities.
Financial Dependents: Family members who rely on the policyholder’s income for their financial well-being.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.