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Saving Schemes Offered in India and Which One You should Subscribe?

by Soft2share.com

Investment is the process of securing money for a fixed period of time and earn on the invested amount on the basis of the power of compounding. People plan for an investment when they have a certain amount of their saving parked without any usage. This invested amount can be useful during rainy days. Schemes like FD (Fixed Deposit), PPF (Public Provident Fund), Mutual Funds, etc. are quite popular investment options in India.

What Plan to Choose for Secure Investment?

In India, an investor has many options for securely investing their money. They have varied options like FD, Recurring Deposit (RD), Post Office Monthly Income Scheme (POMIS), National Savings Certificate (NSC), Fixed Maturity Plan (FMP), Debt Mutual Funds, etc. Under fixed deposit, one can invest their money at once for a certain period while in recurring deposit one can make monthly deposits. Monthly Income Scheme and National Saving Certificate are two of the saving schemes provided by post offices of India. ELSS and Debt mutual funds are a type of mutual funds, where multiple investors can pool and invest. Mutual funds are also programmed by shareholders.

Best schemes for investments in India

One should carefully consider all the options available for investment and opt for the most suitable plan. A few of the most popular Investment schemes in India are described below:

Mutual funds

Shareholders offer this scheme, or even a group of people can pool and invest their money. One can hire a professional team to pool and invest money for them or one can directly invest in mutual funds as well. A systematic investment plan is also a good option. One may need the help of an expert as mutual funds might be complicated to manage. With attractive returns, mutual funds come with the downfall to higher risk and complex management. One can opt for this scheme when they are well versed with the system or afford to take more risk.

Public Provident Funds

The public provident fund account is saving as well as tax saving account backed by the Indian government. It is suitable for someone looking for long-term investments. One can put their lump sum of money in a PPF account, or they can invest an amount of Rs. 500 – Rs. 1,50,00 rupees a year within 12 installments. The amount can be deposited monthly or anytime time as per the convenience of the investor. The lock-in period for a PPF account is 15 years. An NRI or HUF cannot invest in this scheme. In the time of inflation, the interest rate earned may be less and hence can lower the returns.

Fixed Deposits

Fixed deposits are known to be the safest and hassle-free investment option. Most banks and NBFCs offer this scheme. Any citizen of India can invest in this offer and receive an assured FD interest rate. The rate of interest provided by various financial institutions may vary. These  Interest rates on FD are dependent on the amount deposited, and the tenor opted by the investor. The maturity period is called tenor. The most significant benefit of FD is one can receive a certain amount on their investment which they can reinvest or receive them periodically as well as at the time of maturity. One of the leading NBFC of India, Bajaj Finance, provide the highest rate of interest with many attractive features. One can calculate the FD interest rate and the amount they can earn by the end of tenor using a simple tool called FD calculator.

National Savings Certificate

NSC is the certificate that one can obtain from post offices in India. It is suitable for small to mid-income investors, who wish to save on the taxes. They have a fixed tenor of 5 or 10 years. Although there is no limit on investment amount, investment above 1.5 lakh may lead to tax-break under section 80C. One of the demerits of NSC is that the invested amount is not allowed to withdraw before the maturity period.

Equity Linked Saving Schemes

ELSS are mutual fund-based tax-saving schemes. One can invest in ELSS with the minimum amount of 500 rupees and the lock-in period for ELSS is three years. Although an investor can earn a higher amount with ELSS, there is always high risk associated with the investment. And hence it is less suitable for people who prefer secure investment options.

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