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Government Security
Safe Heaven: Small Savings Schemes
The following chart shows comparison of various investment avenues for retail investors.sex toys and lingerie new nike air max nike air jordan 6 retro unc sneakers womens sex toys wigs on sale adidas online shop custom nfl jerseys custom nfl jersey best sex toys for women custom baseball jerseys hockey jersey customizer nike air max sale mens hockey jersey customizer human hair lace front wigs nfl fantasy
| Particulars | Senior Citizens Savings Scheme | RBI Savings Bonds | Post office Monthly Income Scheme | Post office Recurring Deposit | National | Kisan Vikas | PPF |
| Rate Of Interest | 9% | 8% | 8% | 7.50% | 8% | 8.40% | 8% |
| Interest payment frequency | Quarterly | Half Yearly / | Monthly | Compounded | Half Yearly | Compounded | Compounded |
| Eligible Age (Years) | Above 60 | NA | NA | NA | NA | NA | NA |
| Tenure | 5 years | 6 years | 6 years | 5 years | 6 years | 8 years 7 Months | 15 Years |
| Premature withdrawal | After 1st year | Not Available | After 1st year | After 1st year | After 4th year | Available | After 7 years |
| Transferability | NA | Can be gifted | NA | NA | Yes | Yes | NA |
| Taxability of Interest Income | Fully Taxable | Fully Taxable | Fully Taxable | Fully Taxable | Fully Taxable | Fully Taxable | Fully Exempt |
| Max Investment ceiling Rs. | 15,00,000 | NA | 4,50,000 in Single Name | NA | NA | NA | 70,000 p.a |
| Min Investment ceiling Rs. | 1,000 | 1,000 | 1,500 | 10 | 100 | 500 | 500 |
| Nomination facility | Available | Available | Available | Available | Available | Available | Available |
| Mode of Holding | Physical | Bond ledger a/c | Physical | Physical | Demat, Physical | Demat, Physical | Physical |
| Tax benefit u/sec 80 C | Not Available | Not Available | Not Available | Not Available | Available | Not Available | Available |
Public Provident Fund
During the process of asset allocation, financial advisors will generally recommend an allocation to Public Provident Funds in the debt portfolios of their clients. Debt allocations are meant to reduce volatility of returns and provide stability to the portfolios. Amongst various instruments available to individual investors, the PPF is a must have for the following benefits.
1. Safety of returns – The PPF is a statutory scheme of the Central Government
2. Tax Free returns – 8 % compounded annually is tax-free
3. Scheme qualifies for Section 80 C benefits
4. Deposits are exempt from wealth tax.
5. The balance amount in PPF in PPF account is not subject to attachment under any order or decree of court in respect of any debt or liability.
6. Easy to operate – the PPF account can be opened in any public sector bank or post office
Other features
- The minimum deposit is 500/- and maximum is Rs. 70,000/- in a financial year.
- PPF can be opened in minors name too.
- Minimum time period is 15 years which can be extended in blocks of five years with or without contributions.
Limitations of the Scheme
- Limited Liquidity- The PPF does not allow for premature closure or withdrawal of funds. Part withdrawals are allowed after 7th year only.
- The rate of interest of 8 % is not contractual. The government can change the rate any time even on existing accounts. Of course this is with prospective effect i.e. applicable to the period from which change is made.
One must open PPF accounts in all family members name (including minors) as part of their long-term debt allocations. Over 15 years a sum of Rs. 70000 invested every year grows to Rs.2, 05,270 tax free and safe (subject to the interest rate reminding at 8 %). If invested in a disciplined manner in other family members name as well, the corpus will be sizable for meeting major milestone expenses like child’s education, marriage and retirement too. Of course starting early is the key.