Retirement is a time to relax and enjoy and to make the most of your free time. However, it can be bad if you have to remain financially dependent on someone or the job you just got retired from. To save you from such hassles you can start investing early in investment options made for retirees.
Public Provident Fund or PPF
Initiated by the government the scheme is designed to help people planning their retirement save on a regular basis.the minimum investment can be Rs. 500 which is deposited in 12 instalments. While, the maximum investment amount is Rs. 1.5 lakhs with tax exemption benefits under Section 80C of the Income Tax Act. besides, the interest earned at the time of maturity of the deposit remain tax-free.
The PPF comes with a lock-in period of 15 years an it can be closed in case of untimely death of the account holder. However, in case of financial urgency you can make one withdrawal per annum or withdraw up to 50% of the invested amount by the 5th year of the investment. Additionally, you can apply for loan before the 7th year of investment, up to 25% of the investment.
Fixed Deposit After the completion of the lock-in period you can invest the Provident Fund amount in fixed deposit of any leading NBFC. the reason being this kind of investment will offer higher return due to interest rate starting from - 8.75% onward, flexible lock-in period from 12 to 60 months, irrespective of the market fluctuations. You can easily book an FD online with minimum paperwork for yourself or for your family members. The process does not take long and lets you book the FD with just Rs. 25,000. You may use the FD calculator available online to evaluate returns on your investment and to make the most of your investment. Also, Read Related Article: Why you should consider investing in a PPF for your retirement?
1 Comment
Saving has become an integral part of our finances especially in times when inflation is slowly eating up our expenses. To start saving early is a smart way to build wealth and to grow your corpus. Here some crucial tips which first-time investors must keep in mind before they start to invest -
Read Related Post: HOW TO SAFEGUARD YOUR RETIREMENT SAVINGS FROM STOCK MARKET CRASH While, saving it is very important to give due consideration to the source(s) of income. As they may change with time or not change at all. This will directly affect your lifestyle choices and hence you must be change your saving strategy accordingly. To take informed decisions you can take the help of a financial advisor or someone well aware of the saving options. Also, Read Related Post: Smart Investment Tips for Beginners NBFCs offer multiple advantages in comparison to a bank FD, especially in the rate of interest. Fixed deposits are offered in two distinct versions, cumulative and non-cumulative. Each of them is different in how they pay out their FD interest rates. Cumulative fixed deposits compound the interest each year (or every quarter) and return it to the investor after maturity along with the principal. It is a great FD scheme for people who are looking forward to investing their wealth for a much greater return. These schemes are popularly known as money multiplier schemes because of their longer lock-on period, and cumulative addition of interest. Cumulative fixed deposits are ideal for young professionals who do not want access to a monthly fund right away. For instance, if you choose a cumulative scheme in an NBFC at 10% FD interest rates, you will not get anything every month, or year. However, after the tenure ends, that firm will pay you your principal amount with the accumulated interest. Suppose you have an FD of Rs. 1 Lakh, at the end of the first year, you will get back Rs. 1.10 lakhs.
In most schemes, cumulative fixed deposits are compounded quarterly. This interest is reinvested with the principal amount over the period of maturity. Generally, this period ranges anywhere from 6 months to 10 years. Companies like Bajaj Finserv offers a flexible tenor period of 12 to 60 months, and offer a market leading 8.75% FD interest rates. You can choose the best cumulative fixed deposit scheme with the help of an FD calculator, calculate the term period, principal amount, and choose the best return for your policies. |
CATEGORY
About Author:Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms. Archives
August 2022
|