What are small saving schemes and how they can serve you? Read all about them in brief
Small saving schemes: Fixed income investment is for people who want to make lots of money, but do not want to take risk that may lead to money loss
Small saving schemes: Nothing beats making money! However, nothing is more unacceptable than losing money. So, for those who want to make a lot of money, but not take risk while doing it, the ideal place to put their cash in is fixed-income investment. However, do note that, this is not a get-rich-quick solution. In it there is a fixed interest that gives you a fixed return on your investment. Fixed income investments are for those people who have a lower appetite for risks or a small investment bandwidth. These investments mostly have a lock-in period.
Several options are available for people interested in fixed income schemes. These are also very popular among the people owing to lesser investment risk and a fixed income.
Our expert Jitendra Solanki puts before us a host of fixed income scheme options that could be good for you.
-- Public Provident Fund - PPF is a small saving scheme that has a maturity period of 15 years. It is an EEE category investment that gives investors a triple-tax benefit. You can invest between Rs 500 and Rs 150000 per year. The government may or may not revise interest rates every quarter. Currently, the interest on PPF is around 7.7%.
--Sukanya Samriddhi Yojana - This scheme has been started for the girl child. The scheme can be subscribed from the birth of the child up to 10 years. This scheme can be used only for the education and marriage of the girl child. The account can be opened from Rs 500 and allows a maximum deposit of Rs 150000 in a year. The scheme offers tax benefits. The scheme is offering an interest rate of 8.4%.
--Senior Citizen Savings Scheme - This scheme is applicable for people with 60 years of age or more. The scheme offers tax rebates under section 80C of the Income Tax Act. There is a penalty for premature withdrawal. The investor can invest from Rs 1000 to Rs 1500000. The interest rate for the Jan-Mar 2020 quarter is 8.6%.
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--National Pension Scheme (NPS) -The scheme has become attractive after the change in the tax system. The scheme offers tax benefits on a 60% amount after retirement. It is mandatory to invest in 40% annuity. The investment falls under 80C of the Income Tax Act. Additional rebate of Rs 50000 under 80 CCD (1B). Under this scheme, up to 10% deposited amount is tax-free under 80CCD (2). The scheme has given around 9.33% return in the last 5 years.
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