The interest rate on SCSS is payable quarterly and is fully taxable.
The upper investment limit is Rs 15 lakh, and one may open more than one account. SCSS has a five-year tenure, which can be further extended by three years once the scheme matures. SCSS can be availed from a post office or a bank by anyone above 60.
As the name suggests, only senior citizens or early retirees can invest in this scheme. Probably the first choice of most retirees, the Senior Citizens' Saving Scheme is a must-have in their investment portfolios. The interest rate earned is added to one's income and is taxed as per one's income slab. As per the need, one may opt for monthly, quarterly, half-yearly, yearly or cumulative interest option in them. Under the deposit insurance and credit guarantee corporation (DICGC) rules, each depositor in a bank is insured up to a maximum of Rs 5 lakh with effect from Februfor both principal and interest amount.Įarlier, the coverage was maximum of Rs 1 lakh for both principal and interest amount. Read more about the PPF here.Ī bank fixed deposit is considered a comparatively safer (than equity or mutual funds) choice for investing in India. Remember, interest rate on PPF is reviewed every quarter by the government. Further, since the interest earned and the principal invested is backed by sovereign guarantee, it makes it a safe investment. Since PPF has a long tenure of 15 years, the impact of compounding of tax-free interest is huge, especially in the later years. Based on your risk appetite, you can decide how much of your money can be invested in equities through NPS. It is a mix of equity, fixed deposits, corporate bonds, liquid funds and government funds, among others. The minimum annual (April-March) contribution for an NPS Tier-1 account to remain active has been reduced from Rs 6,000 to Rs 1,000.
The National Pension System (NPS) is a long term retirement - focused investment product managed by the Pension Fund Regulatory and Development Authority (PFRDA). Therefore, investors should study the related risks before investing. They carry risks such as interest rate risk and credit risk. However, these mutual funds are not risk free. Debt mutual funds primarily invest in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper and other money market instruments. They are less volatile and, hence, considered less risky compared to equity funds. Read more about equity mutual funds.ĭebt mutual fund schemes are suitable for investors who want steady returns. They are also categorised by whether they are domestic (investing in stocks of only Indian companies) or international (investing in stocks of overseas companies). Equity schemes are categorised according to market-capitalisation or the sectors in which they invest. Index funds and exchange-traded fund (ETFs) are passively managed, and these track the underlying index. In an actively traded fund, the returns are largely dependent on a fund manager's ability to generate returns. An equity fund can be actively managed or passively managed. As per current the Securities and Exchange Board of India (Sebi) Mutual Fund Regulations, an equity mutual fund scheme must invest at least 65 percent of its assets in equity and equity-related instruments. Here's how you can open one to invest in shares.Įquity mutual fund schemes predominantly invest in equity stocks.
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