Nowadays expenses are so high that Savings and investment is a must for every individual. People have a high interest in a lot of things and they have to pay to avail of all the services and facilities. Therefore, we can say that people are looking for different best investment methods so that they could save some money for the future and can get interested in their money. Earlier the people and the bank both are not aware of these things because there is no need to spend extra. But as the need for people is increasing the need for investment is also increasing parallel. So, now the bank has decided to give facilities to their customers so that they could invest in different ways. Therefore, there are different ways that are being provided by different banks to the customers to invest their money.
How Does This Investment Help?
An investment plan helps both the bank and the person. A person who is going to invest in is going to get interested in his investment plan and hence it is an advantage for the person. Also, he or she will be able to get the money at the time of need that he or she had saved. On the other side, the bank will get the money in bulk and they can use it for various purposes. Hence, it is a Win-Win situation for both sides and hence is profiting very well for both of them.
Best Investment Plan Which One Can Select
After knowing about how the investment policies through Bank can create a win-win situation between both the customer and the bank now we are going to look forward to the best investment policies.
|Fixed Deposit (FD)
|It will provide a high rate of interest to the investor than usually, a normal saving account provides.
|Recurring Deposit (RD)
|The method of investment is offered to investors by Indian Banks, where the investors need to make a timely deposit every month into their RD Account to get good interest.
|Public Provident Fund (PPF)
|It is both savings and a tax-saving method of investment. One can do small savings with required returns on it.
|Investor can invest their money in one place where all the investments are professionally managed.
|National Pension System (NPS)
|It is a type of scheme which is contributing to providing income to the old people, they will also get required returns, and also if needed the old age security system will be extended.
A Brief About All the Investments
1. Fixed Deposit (FD)
Fixed deposit is a type of investment in a bank in which you have to deposit an amount in the FD account and for which you will be able to get a higher rate of interest on your savings. The rate of interest and the amount has to be submitted will vary from one bank to another.
In a fixed deposit, the money is to be in the account until the maturity date and if you have to withdraw it before that then one has to pay the penalty for it.
Features and Merits of FD Account
- It will help the investor to have higher interest in their Investments.
- The money has to be deposited in the accounts in one go and if you want to deposit more money then a new fixed deposit account has to be opened.
- The fixed deposit through the bank gives a higher rate of interest than the company fixed deposit.
- One can get their deposit renewed easily after maturity time.
- It is a very safe way to invest your money and the stability of the deposit is great.
- There is no risk of loss and hence the returns are assured.
- Even one can get the interest monthly for their expenses.
- Even some of the banks provide a higher rate of interest for senior citizens than a normal one.
- So, we can say that it is a very good method of investing your money.
Tax Saving on FD
The tax which will usually be deducted on a fixed deposit is 0% to 30% which is dependent on the income tax bracket of an individual.
2. Recurring Deposit (RD)
These are the type of deposits in which the people are allowed to save a fixed amount of money in their accounts every month and for their investment, they will get a return on it which is small but still reliable. Therefore, those people who are unable to make a high investment in one go can opt for this option to deposit a small amount every month. Even the order could be opened with a sum of rupees 10 only.
Features And Merits of RD Account
- The rate of interest on every RD is different from one bank to another and it also depends upon the amount you are depositing in the account of RD.
- The tenure offered is different from one bank to another but the approximate tenure is between 6 months to 10 years.
- At the time of maturity of the reactant deposit, the saved amount which you have deposited along with the interest will be paid to the investor in cash or credited to their account.
- Even the bank acts as Collateral while applying for the loans.
- Similar, to the FDs the RD’s, can be withdrawn before the maturity period when the penalty has to be paid.
Tax Saving on RD
The TDS deducted on the RD’s is depended upon the interest that a person receives. That is if the amount of interest increases by 10000 per annum then 10% of TDS will be deducted.
3. Public Provident Fund (PPF)
It is a kind of Savings and tax savings instrument which is providing the chance for people to invest and get a reasonable return. There are many benefits and the tax benefits are attached to the PPF scheme which is guaranteed by the central government. One can opt for it at an early age through little investment.
Features And Merits of PPF Account
- One can get a PPF account at a subscription of a hundred rupees only and the deposit can be made from Rs. 500 to 150000 in a year.
- It is a 15-year investment scheme in which the person can withdraw the amount after maturity.
- One will be able to open and new PPF account after the expiration of the first.
- The initial interest over the PPF account is 8% as per the government.
- For the initial 15 years, you cannot take any amount from your PPF account but if you want to continue or extend the limit of your PPF account after 15 years then you can withdraw 40% of the amount from it only.
- A very easy method to invest money at an early age for the long term.
- Even the banks are providing a loan based on the PPF account history of an account holder.
- The account cannot be transferred from one person to another but its branch could be transferred all over the country if the open changes its place of living in that 15-Year.
Tax Saving on PPF
The PPF comes under the EEE tax basket. The investor can claim a tax deduction on the money deposited in the PPF and this could be done under section 80c of the income tax.
4. Mutual Funds
Nowadays mutual friends are a very popular way of investing money. But before starting to invest in mutual funds one has to go through all the advantages and disadvantages of mutual funds. It is like a shareholding in which you can suffer loss or profit but you have to check the market properly before investing.
Features and Merits of Mutual Funds
- A mutual fund is a type of investment in which a small price is paid to a professional to manage your investment portfolio to get a profit.
- One capital grows its investment by purchasing additional shares by declaring the interest income dividends for the same.
- The application can be used to reduce the risk factor while purchasing a particular stock.
- Mutual Funds are very easy to buy once a person understands the procedure of investing in it. Hence, if one has good knowledge of mutual funds then one can go for it to get a good return on their investment.
Tax Saving on Mutual Funds
There are no other equity funds for the tax deduction under section 80c but one can get the tax-free equity mutual funds.
5. National Pension System (NPS)
A national pension scheme is launched by the government of India to provide assistance to old people. The investors are allowed to invest in their pension accounts as a subscriber and can get returns on their retirement.
Features and Merits of NPS
- The pension scheme is launched to give an income to old age people as security.
- It is a type of long-term investment in which the returns are safe.
- One can get a range of investment options to select the best way to get the returns.
- Switching from one investment option to the other is also easy under the NPS scheme.
- The scheme is very easy to operate online as one just has to go to the eNPS portal.
- Hence, a very good way to invest for a person to get assistance in there that age when they are not being able to on a monthly income.
- At the time these returns will help them to survive properly.
Tax Saving on NPS
If a person investing up to 50000 rupees in the NPS subscribing then the tax deduction under section 80ccd is applicable.
Therefore, the above-mentioned are some best investment methods to which one can invest money. The investment returns will be good if you invest your amount after going through the details of all the above-mentioned policies. We hope that you will get the best assistance for your investment and you will get the best way to invest the money.