This article by cleartax shall help you understand tax savings instruments in further details
Start exploring now and find the perfect match for your investment style.
These are the investment instruments which allows multiple contributions from the investor but without a requirement for the same. Thus it is good for people who have ascertain expenses or ascertain amount of savings in a period.
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options ...
Investing in stocks, also called shares, allows you to be part-owner of a company. To simplify this complex instrument, through stock a company sells a part of it's ownership to the share/stockholder in exchange of their money. The company then us...
These are the investment instruments which are issued by either state government or Central government. The government issuing such investment instruments ensures the interests are paid in a timely manner.
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retire...
National Savings Certificate are investment instruments backed by Central Government of India which provides tax exemptions upto an investment of 1.5 lakhs per annum and no TDS on the interest earned for the first 4 years. The lock in period is fo...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
Voluntary Provident Fund is a part of EPF/EPS investment instrument where an employee can increase his share of contribution to more than 12% of his Basic+DA salary. An employee can contribute upto 100% of his Basic+DA through VPF however, it is t...
Guaranteed Return ensures that the promised return amount is fixed and will be paid to you without depending on market performance. This gives you complete peace of mind knowing your investment is secure and predictable.
Coupon bonds are bonds which pays periodic coupon payments to the bond holder/s for fixed interval of time and at maturity also pays the face value amount of the bond. Typically, coupon payments are calculated annually but are paid semi-annually i...
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retire...
Some financial institutions also provide an option of Tax Saving Fixed Deposits where the amount invested has a lock in period, generally for 5 years, and the invested amount for upto 1.5 lakhs per annum is exempted of tax i.e. reduced from taxabl...
An FD is an investment instrument where an investor invests a fixed amount for a fixed amount of time and earns a predetermined rate of interest on the invested amount. In a fixed deposit with compounding interest, the interest earned by the inves...
In this an investor invests in a FD, however the interest amount is not compounded, but instead is credited to the savings account. Thus, this is ideal for those investors who would like to have a stable investment from their investment and also k...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a fixed tenure and earn interest at a predetermined rate. It's a great option for disciplined savers who want guaranteed returns with small monthly contr...
Savings accounts are the most common high liquidity instrument. They allow you to deposit and withdraw funds anytime while earning interest (usually 2–4% p.a.). They are suitable for emergency funds and daily transactions.
...This is an alternative to regular term insurance plans where the insurance premium paid does not get refunded to the investor. In addition to the refund of premium paid, the insurance companies also provide other benefits like vested compound reve...
Voluntary Provident Fund is a part of EPF/EPS investment instrument where an employee can increase his share of contribution to more than 12% of his Basic+DA salary. An employee can contribute upto 100% of his Basic+DA through VPF however, it is t...
Zero-coupon bonds, also called No-coupon bonds are debt instruments, i.e. by purchasing a bond the investor is lending the money to the bond issuing institution, be it central government, state government, municipal bodies or a corporate house. Th...
High liquidity investment Instruments are financial instruments that can be quickly converted into cash with minimal loss in value. They are ideal for emergency funds, short-term goals, or when you need quick access to your money. These investments usually have lower returns compared to long-term options but provide flexibility and safety.
Cash are the most liquid form of assets an individual can have and thus are kept as an emergency fund by most individuals. Cash is one of very few legal form of money allowed to be an exchange for a product or service in India thus making them an ...
E-Wallets provide convenience of payment and another level of security to it's users, as compared to payments made directly through bank accounts as even if the e-wallet account gets compromised the loss to the individual shall be limited to the e...
Gold is one of the most valuable metal in this world. Its value comes from its unique properties increasing its demand in the market. Its properties like high ductility, malleability, high conductivity, high corrosion resistance, inert nature etc ...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options ...
Savings accounts are the most common high liquidity instrument. They allow you to deposit and withdraw funds anytime while earning interest (usually 2–4% p.a.). They are suitable for emergency funds and daily transactions.
...Investing in stocks, also called shares, allows you to be part-owner of a company. To simplify this complex instrument, through stock a company sells a part of it's ownership to the share/stockholder in exchange of their money. The company then us...
These are investment instruments which have high probability of loosing the investor's money however, most high risk investments also provide high return thus it is sought after by investors with high risk-appetite.
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
These are the instruments which may provide a return of 10% or more. However, it is to be kept in mind that some of these may not guarantee a return thus people should take the investment decision after considering their risk-appetite.
Gold is one of the most valuable metal in this world. Its value comes from its unique properties increasing its demand in the market. Its properties like high ductility, malleability, high conductivity, high corrosion resistance, inert nature etc ...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently...
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options ...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
Real estate includes land or any envelopment done to it including building a house, building a shop, building a boundary wall etc. The price of the real estate depends upon it's demand in the market and the profit is realized on the same of the pr...
Investing in stocks, also called shares, allows you to be part-owner of a company. To simplify this complex instrument, through stock a company sells a part of it's ownership to the share/stockholder in exchange of their money. The company then us...
These are the instruments which may provide a return of 20% or more. However, it is to be kept in mind that these do not guarantee a return thus people should take the investment decision after considering their risk-appetite. These should only be invested by those who have high risk-appetite and can invest their money for a long time and are even OK with a loss from the investment in the future.
Gold is one of the most valuable metal in this world. Its value comes from its unique properties increasing its demand in the market. Its properties like high ductility, malleability, high conductivity, high corrosion resistance, inert nature etc ...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently...
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options ...
Real estate includes land or any envelopment done to it including building a house, building a shop, building a boundary wall etc. The price of the real estate depends upon it's demand in the market and the profit is realized on the same of the pr...
Investing in stocks, also called shares, allows you to be part-owner of a company. To simplify this complex instrument, through stock a company sells a part of it's ownership to the share/stockholder in exchange of their money. The company then us...
Low-risk Investment Instruments are financial instruments that prioritize the safety of capital over high returns. They are ideal for conservative investors who prefer steady income and minimal volatility. These investments are less affected by market fluctuations and often come with guaranteed returns.
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retire...
Some financial institutions also provide an option of Tax Saving Fixed Deposits where the amount invested has a lock in period, generally for 5 years, and the invested amount for upto 1.5 lakhs per annum is exempted of tax i.e. reduced from taxabl...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a fixed tenure and earn interest at a predetermined rate. It's a great option for disciplined savers who want guaranteed returns with small monthly contr...
Savings accounts are the most common high liquidity instrument. They allow you to deposit and withdraw funds anytime while earning interest (usually 2–4% p.a.). They are suitable for emergency funds and daily transactions.
...Voluntary Provident Fund is a part of EPF/EPS investment instrument where an employee can increase his share of contribution to more than 12% of his Basic+DA salary. An employee can contribute upto 100% of his Basic+DA through VPF however, it is t...
These are the investment instruments whose returns are linked to market performance, thus the return on the investment fluctuates with the market; at any point it may provide profit or loss depending on the market conditions.
Gold is one of the most valuable metal in this world. Its value comes from its unique properties increasing its demand in the market. Its properties like high ductility, malleability, high conductivity, high corrosion resistance, inert nature etc ...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently...
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options ...
Real estate includes land or any envelopment done to it including building a house, building a shop, building a boundary wall etc. The price of the real estate depends upon it's demand in the market and the profit is realized on the same of the pr...
Investing in stocks, also called shares, allows you to be part-owner of a company. To simplify this complex instrument, through stock a company sells a part of it's ownership to the share/stockholder in exchange of their money. The company then us...
These are the investment instruments which allows the investors to withdraw their money at any time without any conditions for withdrawal however, there can be some penalty charged for the withdrawal depending upon the time for which the amount was invested in for or upon the amount of money which is being withdrawn.
Coupon bonds are bonds which pays periodic coupon payments to the bond holder/s for fixed interval of time and at maturity also pays the face value amount of the bond. Typically, coupon payments are calculated annually but are paid semi-annually i...
An FD is an investment instrument where an investor invests a fixed amount for a fixed amount of time and earns a predetermined rate of interest on the invested amount. In a fixed deposit with compounding interest, the interest earned by the inves...
In this an investor invests in a FD, however the interest amount is not compounded, but instead is credited to the savings account. Thus, this is ideal for those investors who would like to have a stable investment from their investment and also k...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a fixed tenure and earn interest at a predetermined rate. It's a great option for disciplined savers who want guaranteed returns with small monthly contr...
Zero-coupon bonds, also called No-coupon bonds are debt instruments, i.e. by purchasing a bond the investor is lending the money to the bond issuing institution, be it central government, state government, municipal bodies or a corporate house. Th...
These are the instruments which do not provide any return however they might directly or indirectly contribute to investment for an individual as they provide a platform to save money which then can be used for investment later.
Cash are the most liquid form of assets an individual can have and thus are kept as an emergency fund by most individuals. Cash is one of very few legal form of money allowed to be an exchange for a product or service in India thus making them an ...
E-Wallets provide convenience of payment and another level of security to it's users, as compared to payments made directly through bank accounts as even if the e-wallet account gets compromised the loss to the individual shall be limited to the e...
These are the investment instruments which allows users to contribute a sum of money in regular intervals for a fixed amount of time. Most of these instruments also allow relatively smaller amount of money as contributions which allow the users to invest even small amounts resulting in regular and efficient saving. This is ideal for people who have hard time saving money as they are forced to invest a certain sum of money regularly and they might have to face a penalty for not paying the regular amount. These are also good for diversification for an individual with lower investment corpus due to relatively low amount of contribution required for the investment.
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retire...
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest i...
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a fixed tenure and earn interest at a predetermined rate. It's a great option for disciplined savers who want guaranteed returns with small monthly contr...
This is an alternative to regular term insurance plans where the insurance premium paid does not get refunded to the investor. In addition to the refund of premium paid, the insurance companies also provide other benefits like vested compound reve...
These are the investment instruments which yield regular fixed amount of income.
Coupon bonds are bonds which pays periodic coupon payments to the bond holder/s for fixed interval of time and at maturity also pays the face value amount of the bond. Typically, coupon payments are calculated annually but are paid semi-annually i...
In this an investor invests in a FD, however the interest amount is not compounded, but instead is credited to the savings account. Thus, this is ideal for those investors who would like to have a stable investment from their investment and also k...
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charg...
This is an alternative to regular term insurance plans where the insurance premium paid does not get refunded to the investor. In addition to the refund of premium paid, the insurance companies also provide other benefits like vested compound reve...
There are the investment instruments which are used for income after retirement. A regular investment in such investment instruments can be beneficial for a comfortable post retirement life/living.
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retire...
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently...
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options ...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
This is an alternative to regular term insurance plans where the insurance premium paid does not get refunded to the investor. In addition to the refund of premium paid, the insurance companies also provide other benefits like vested compound reve...
Voluntary Provident Fund is a part of EPF/EPS investment instrument where an employee can increase his share of contribution to more than 12% of his Basic+DA salary. An employee can contribute upto 100% of his Basic+DA through VPF however, it is t...
These instruments can help the investors save income tax thus increasing spendable income of the individual.
This article by cleartax shall help you understand tax savings instruments in further details
Coupon bonds are bonds which pays periodic coupon payments to the bond holder/s for fixed interval of time and at maturity also pays the face value amount of the bond. Typically, coupon payments are calculated annually but are paid semi-annually i...
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retire...
Some financial institutions also provide an option of Tax Saving Fixed Deposits where the amount invested has a lock in period, generally for 5 years, and the invested amount for upto 1.5 lakhs per annum is exempted of tax i.e. reduced from taxabl...
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently...
National Savings Certificate are investment instruments backed by Central Government of India which provides tax exemptions upto an investment of 1.5 lakhs per annum and no TDS on the interest earned for the first 4 years. The lock in period is fo...
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the inves...
This is an alternative to regular term insurance plans where the insurance premium paid does not get refunded to the investor. In addition to the refund of premium paid, the insurance companies also provide other benefits like vested compound reve...
Voluntary Provident Fund is a part of EPF/EPS investment instrument where an employee can increase his share of contribution to more than 12% of his Basic+DA salary. An employee can contribute upto 100% of his Basic+DA through VPF however, it is t...
Zero-coupon bonds, also called No-coupon bonds are debt instruments, i.e. by purchasing a bond the investor is lending the money to the bond issuing institution, be it central government, state government, municipal bodies or a corporate house. Th...
Explore different instruments in your chosen category and pick the right ones to build your portfolio.
Cash are the most liquid form of assets an individual can have and thus are kept as an emergency fund by most individuals. Cash is one of very few legal form of money allowed to be an exchange for a product or service in India thus making them an unavoidable part of our life, even in these modern times, as it let us pay for the products or services, when we don't have internet connectivity or when our mobile phones die-off; however, one needs to understand that cash does not provide any return thus we have to compensate this by earning more interest from other investment instruments to keep growing our overall wealth.
Cash also provides a medium for small savings which then can be used for investment when one's corpus grows to a significant amount. Another reality of our country is cash is often used to trade for products and services instead of banking transactions to save taxes, however people need to realize that this when these incomes are not declared they cannot be used for investment thus increasing the required return from other investment instruments which in-turn increases the risk of an individual.
Coupon bonds are bonds which pays periodic coupon payments to the bond holder/s for fixed interval of time and at maturity also pays the face value amount of the bond. Typically, coupon payments are calculated annually but are paid semi-annually i.e. the annual coupon amount is paid in two stages six month apart from each other.
Bonds are debt instruments issued by central government, state government, municipal corporations, private and public registered companies or even non-registered companies however investment in bonds of non-registered companies should be avoided as these are sold in non regulated market which increases the possibility of a fraud. Bonds of registered companies are regulated by the bond market regulator i.e. SEBI and thus are quite secure.
Since bonds are debt instruments, these are a liability for the issuer and in the event of liquidation of their assets due to bankruptcy, the bond holders get priority over equity holders. This gives an added security to the bondholders; also, since bonds are considered as a liability, thus, if the issuing institution fails to pay their coupon payments, the bond holder has the right to call for liquidation of the assets of a company for the payment of his money thus bonds generally pay their coupon payments or maturity value on time making them more trustworthy and secure.
High security of bonds and regular and periodic payment of coupon payment also makes it ideal for investment by risk-averse investors like retired officials. It is also preferred by people who would like to have a periodic income. The bonds can also be sold in the secondary markets, if there is any buyer ready to buy it in the market, making it a little liquid. However the investor may also loose money if the bond is selling at a discount; this generally happens when the interest rate of a similar rated bond goes up in the market, it is to be noted that change in interest rate in the market does not affect the coupon payment amount or the face value amount of the bond and a bondholder continues to get coupon payment and also the maturity value.
Apart from the above mentioned points, some bond issued by central governments also provide tax benefits, i.e. the coupon payments don't attract any tax.
Users can buy or sell bonds in the secondary market from here.
A coupon payment is the periodic interest payment made to a bondholder by the bond issuer. It is calculated as a percentage of the bond’s face value, known as the coupon rate. Payments can be annual, semi-annual, or quarterly, and they represent the regular income earned from holding the bond, not including any capital gains or losses from selling the bond.
This article explains what coupon payments are, how they are calculated, and the different payment frequencies.
This article delves into how a bond's coupon rate influences its market price. It explains that when a bond's coupon rate is higher than prevailing market interest rates, the bond's price tends to rise, and conversely, if the coupon rate is lower, the bond's price tends to fall. The piece also discusses the relationship between coupon rates and bond yields, providing insights into how investors assess bond investments.
Yes TDS s generally deducted from the coupon payments however, some government issued bonds are tax exempt and thus should be researched for the same to save TDS deduction.
This article explains what coupon payments are, how they are calculated, and the different payment frequencies.
This article delves into how a bond's coupon rate influences its market price. It explains that when a bond's coupon rate is higher than prevailing market interest rates, the bond's price tends to rise, and conversely, if the coupon rate is lower, the bond's price tends to fall. The piece also discusses the relationship between coupon rates and bond yields, providing insights into how investors assess bond investments.
While coupon pauments from some government issued bonds are exempted from TDS, coupon payments from other bonds shall attract a TDS of 10% is PAN card details are provided to the bond brokers, however, if no PAN card details are present a TDS rate of 20% is applicable.
This article explains what coupon payments are, how they are calculated, and the different payment frequencies.
This article delves into how a bond's coupon rate influences its market price. It explains that when a bond's coupon rate is higher than prevailing market interest rates, the bond's price tends to rise, and conversely, if the coupon rate is lower, the bond's price tends to fall. The piece also discusses the relationship between coupon rates and bond yields, providing insights into how investors assess bond investments.
E-Wallets provide convenience of payment and another level of security to it's users, as compared to payments made directly through bank accounts as even if the e-wallet account gets compromised the loss to the individual shall be limited to the e-wallet account balance. However, an individual needs to understand that the balance in the e-wallet accounts do not provide any returns and this should be compensated by earning more return from other investment instruments.
Employee Provident Fund and Employee Pension Scheme is a government program regulated by EPFO where the employees of government sector and private sector with more than 12 employees are ensured of provident funds and a regular pension after retirement. In this the Employee and the employer both are made to contribute 12% of the employee's monthly basic salary+DA. Out of this 12% of the employer contribution, 8.33% goes to EPS account with a ceiling currently at Rs. 1250 and the rest goes to EPF contribution, all of the employee's contribution goes to EPF contribution. The balance in the EPF account earns an interest every month which is credited at the end of a financial year. The interest is calculated on the balance in the EPF account on the 25th of the month, thus any withdrawal done before that should be avoided to earn interest for the month on the withdrawn amount. The amount contributed in the EPS account does not yield any return and also cannot be withdrawn unless the employee has worked for less than 10 years for the organization,however it does ensures a monthly pension after the retirement of the employee if the employee has worked for more than 10 years with the same organization.
An individual can only invest in this scheme if their employer i.e. company is registered under this scheme.
EPFO regulates this investment instruments and a user may go to them if any issue is unresolved by the management team.
Click above to go to official website of EPFO
You can withdraw from your Employees' Provident Fund (EPF) account for full withdrawal after two months of unemployment. Partial withdrawals (advances) are permitted for specific reasons such as medical emergencies, higher education, house purchase, or marriage. You can withdraw from your Employees' Pension Scheme (EPS) account if you have less than 10 years of service and are either unemployed for 60 days or more, or have reached the age of 58 . If you have completed 10 years of service, you cannot withdraw the EPS contribution as a lump sum; instead, you must wait until retirement to receive a monthly pension.
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Click above to go to official website of EPFO
Some financial institutions also provide an option of Tax Saving Fixed Deposits where the amount invested has a lock in period, generally for 5 years, and the invested amount for upto 1.5 lakhs per annum is exempted of tax i.e. reduced from taxable income, however, the interest earned from the FD is taxed and the TDS is deducted, however this can be claimed in income tax return if the investor's tax payable for the financial year is nil.
It is a good option for risk-averse investors who wants to save taxes but they need to be weary of the lock-in period of 5 years where no early withdrawals or closing of FD would be possible.
Most banks provide an option for opening Tax Saving Fixed Deposits.
Tax Saving Fixed Deposits are offered under Post Office Saving Schemes. With most post offices providing internet banking options, investing with them is now easier and convenient.
No, TDS deductions are still applicable for the interest earned, only the invested amount is exempted from income tax according to 80c rule of income tax act.
Yes, many financial institution give that option.
No, the invested amount is locked in for 5 years.
5 years of lockin period.
An FD is an investment instrument where an investor invests a fixed amount for a fixed amount of time and earns a predetermined rate of interest on the invested amount. In a fixed deposit with compounding interest, the interest earned by the invested amount is added to the principle amount and the investor earns interest for the remaining period on the interest earned thus increasing the overall return. Generally, the interest is credited quarterly, i.e. four times in a financial year, on the account balance but different banks and NBFCs may have different rules for the same.
NBFCs offer FD schemes often with higher interest than banks. These can be opened online without having to visit any outlet thus saving travel time and efforts.
Click on the above links for more details from the Stable Money website
All the Banks and NBFCs are regulated by RBI thus if any bank or NBFC doesn't follow their promises related to their FD or if the institution doesn't solve your issue even after filing a written complaint for more than a month you may complain to RBI ombudsman through their official website. For a FD with post office one may complain to higher authority in the post office as mentioned in the official website of India Post.
Nope, the interest rate on an FD is fixed for the term of the FD, thus any increase in the repo rate would not increase the interest earned on the invested amount and any decrease in the interest rate shall not result in decrease in the interest earned. However, if the FD is set for auto-renew at maturity then the interest rate earned by the FD shall be changed as per the FD interest applicable at the time of renewal.
In this an investor invests in a FD, however the interest amount is not compounded, but instead is credited to the savings account. Thus, this is ideal for those investors who would like to have a stable investment from their investment and also keeping the invested amount safe till maturity. Most financial institutions provide an option to get monthly interest. An investor planning to invest in this needs to understand that the value of their invested amount may reduce due to the effect of inflation till maturity, thus he should invest the interest in such a way that at the least the effect of inflation of the invested amount gets negated.
A user may open a FD account with a bank where he has his savings account or he may also open an FD with many banks without having a saving accounts with them also.
NBFCs offer FD schemes often with higher interest than banks. These can be opened online without having to visit any outlet thus saving travel time and efforts.
Gold is one of the most valuable metal in this world. Its value comes from its unique properties increasing its demand in the market. Its properties like high ductility, malleability, high conductivity, high corrosion resistance, inert nature etc ensures its demand in the market which in turn increases it's value. Another reason for its high value is its limited supply as we cannot produce any more gold economically enough to earn any profit, thus its quantity is fixed. Also, gold is formed in the core of a star thus no more gold is being generated on earth.
Due to its high demand and limited supply, gold is very easy to trade in and its value keeps appreciating in the long-run. Due to its high liquidity, government of many countries also keep gold as an asset, called as government gold reserves, in addition to their currency reserves.
However, investment in gold should not be considered risk free as gold prices may experience downturn incurring losses for the investors, specially in the short run. Also, another thing which the investors should be weary about before investing in gold via gold jewellery is the making charges of the jewellery because while selling the jewellery the user shall only get the worth of gold present in the jewellery. The gold price has to increase enough to cover the making charges to break-even for the investor. Also, an investor should also consider other charges like taxes and security charges like bank locker charges (if any) to calculate accurate profit and loss from the trade.
Many companies provide an option to invest in gold digitally. Investors can buy gold as low as for 1 gram and then redeem it for physical gold or trade it in the market.
Investors can invest in gold bullions like coin, biscuits, bricks or rods of various weight, however investors might have to pay for their security which would reduce the total profit earned. If no security measures are taken then there shall always be a risk of theft increasing the risk related to the investment.
No, trade of physical gold is not regulated by any government body.
Yes, it is taxed according to the tax slab of the investor.
Making charges, security charges, taxes and other expenses like traveling charges must be considered before investing in physical gold.
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest in a combination of securities in various proportions. These pool of funds are managed by an Asset Management Company (AMC) who are registered under Security and Exchange Board of India (SEBI) and the decision about which particular securities to be invested in and in what proportion is taken by a registered Mutual Fund Manager.
Through one time contribution the user can invest a big amount of money to buy mutual fund units. An individual can invest in this if he receives a huge sum of money through sale of his property, or maturity of his bond investments, bonus etc.
While this has become a well known investment instrument in India and across the world, the investors need to remember that since these funds invest in market linked securities, thus investment in these funds in itself carries a risk. It is possible that an investor can loose money or have lower returns than what he expected or when the requirement of money arrives in his life, this makes this investment instrument unfavorable for risk-averse investors.
Many mutual funds also provide an option of Systematic Withdrawal Plan (SWP) where a fixed value of units are sold at regular interval providing regular income to the investor.
Many full service stock brokers and discount brokers provide an option to invest in Mutual Funds.
Many banks also provide the facility to invest in Mutual Funds.
SEBI regulates the mutual funds by framing operating rules for the Asset Management Companies (AMCs) in India. An investor should always check if the AMC is registered or not under SEBI to avoid frauds.
Yes, the units can be sold at any time, however an exit load can be levied if all the units are sold (redeemed) before the specified holding period ends.
Exit load is a fee charged by the AMCs when a user sells (redeems) his units before the specified holding period ends.
No returns are not guaranteed, in-fact, an investor may also experience losses.
Mutual funds are a pool of funds which is used to invest in other financial securities; like an equity based mutual funds invest in stocks, a debt based fund invests in debt instruments like bonds, debentures or bills, hybrid mutual funds invest in a combination of securities in various proportions. These pool of funds are managed by an Asset Management Company (AMC) who are registered under Security and Exchange Board of India (SEBI) and the decision about which particular securities to be invested in and in what proportion is taken by a registered Mutual Fund Manager.
An SIP in mutual fund allows users to regularly contribute money to buy units of the mutual fund thus making this a great investment instrument for people who wants regular saving. The best part is that there are no compulsion on time or amount for the contribution and the investor can choose when to invest and when not to and when to invest more and when to invest less without any penalty or fees.
While this has become a well known investment instrument in India and across the world, the investors need to remember that since these funds invest in market linked securities, thus investment in these funds in itself carries a risk. It is possible that an investor can loose money or have lower returns than what he expected or when the requirement of money arrives in his life, this makes this investment instrument unfavorable for risk-averse investors.
Many mutual funds also provide an option of Systematic Withdrawal Plan (SWP) where a fixed value of units are sold at regular interval providing regular income to the investor.
Many full service stock brokers and discount brokers provide an option to invest in Mutual Funds.
Many banks also provide the facility to invest in Mutual Funds.
SEBI regulates the mutual funds by framing operating rules for the Asset Management Companies (AMCs) in India. An investor should always check if the AMC is registered or not under SEBI to avoid frauds.
Yes, the minimum amount differs for each AMC however mostly the minimum required amount is Rs.500.
While this instrument has high liquidity, as in the units can be sold at anytime, however, there is a possibility that the selling price of the units goes less than the purchase price due to which the investor can incur losses.
Mutual funds generally don't have any compulsion on regular investment thus there should not be any consequences what-so-ever.
National Pension System has two kinds of account, Tier 1 and Tier-2 accounts. Here we shall talk about Tier 1 account only.
Tier 1 account is like an EPF account where the Employer and Employee both contribute a certain percentage (currently 10%) of the Basic+DA salary of the employee and the employee can withdraw a part of the total corpus amount (Currently 60%) after his retirement. However the similarity stops here, NPS accounts do not guarantee any returns, when an individual invests in this he purchases the units of the particular pension fund chosen by the investor. These pension funds are managed by a particular Pension Funds Manager (PFM) which the investor may also choose and change twice in a financial year. As the price of the units increases in the market with time, the investor returns increases however, there is also a possibility that the price of the units may go down in which condition the investor may incur losses. Also, the employee can increase his contributions more than 10% of his basic+DA, but the employer contribution shall not be more than 10%.
Also in NPS the user also gets an option to invest in different asset classes namely
The investor can change the proportion of his contribution to be invested in these through Active Mode option offered by the NPS, however the user may also invest according to the predetermined proportion for each asset class according to the age of the investor till his retirement through Auto Mode. It is also important to know that there is a compulsory minimum contribution of Rs.1000 every month from the employee.
The investor should also know that premature withdrawals are not allowed till initial 3 years and limited reasons like child's marriage, higher education etc and limited amount i.e. 25% of the employee contributions. After 10 years the corpus can with withdrawn however atleast 80% of it will have to be invested in an annuity scheme providing annual income after retirement.
This also provide tax exemptions on the contributions under the old tax regime, upto 10% of the basic+DA of the employee salary of 20% of gross income for self employed people. However the user has to pay tax on premature withdrawal amount and on the pension earned as annuity after retirement.
This is ideal for self-employed people looking for a pension instrument after retirement.
Most public banks provide the facility to open an NPS account.
One can go to any post office to get an NPS account.
Most NBFCs provide a facility to open NPS Tier-1 account.
An individual can open a NPS account online via service providers authorized by NPS trust.
Please click on the link above to redirect to NPS trust website stating the authorised service providers to open online NPS account.
Click on the above link to go to the official website of CAMS which is one of the authorised service providers to open online NPS account
No, the returns are market linked and depends upon the market price of the units of the pension fund invested in.
It is regulated by Pension Fund Regulatory and Development Authority (PFRDA).
National Pension System Tier- 2 account is an optional account for an investor with an active tier-1 account which allows the user to invest extra, over and above the tier-1 account contribution, in NPS providing the same investment class options however there are no premature withdrawal restrictions on the contributions and no penalty for the same. Also, the contributions of this account are not tax exempted and the withdrawals are taxed according to the investor's tax slab. There is no yearly minimum contribution requirement for this account and no extra charges to maintain the account.
Since the investments are linked to the market, there is no guaranteed returns thus the investor need to be cautious while premature withdrawal of the contributions as there is a possibility of losses if the price at the time of units being sold is lower than the unit price at the time of purchase.
All major banks provide this account however an individual needs an active NPS tier-1 to have a tier-2 account.
NPS tier-2 account can be opened via post office also until the investor has an active tier-1 account.
Most NBFCs provide a facility to open NPS Tier-2 account.
An individual can open a NPS account online via service providers authorized by NPS trust.
Please click on the link above to redirect to NPS trust website stating the authorised service providers to open online NPS account.
Click on the above link to go to the official website of CAMS which is one of the authorised service providers to open online NPS account
The first installment needs to be of Rs.1000 or more.
No.
No
Yes, however once they are transferred the premature withdrawal restrictions of Tier-1 account shall apply.
Pension Fund Regulatory and Development Authority (PFRDA) regulates this account.
National Savings Certificate are investment instruments backed by Central Government of India which provides tax exemptions upto an investment of 1.5 lakhs per annum and no TDS on the interest earned for the first 4 years. The lock in period is for 5 years however premature withdrawals are not allowed thus this a is low liquidity investment instrument. This, however, provide a guaranteed return which is generally more than FD. The interest is declared every quarter but the interest rate at which the initial investment is done is fixed for the entire 5 years. Being backed by central government this is very safe and thus very favorable for risk-averse investors. This has a minimum initial deposit of Rs. 1000 however above this one can invest in this in a multiple of Rs.100 i.e. a user can invest a sum of 1000 or 1100 or 1200 and so on.
This can be bought online or offline through Indian post office.
Yes, for upto an investment of upto 1.5 lakhs per annum.
Rs. 1000
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charged on the borrowed fund it can be considered as an investment made of off the principle amount that was lent and the interest earned may either be asked to be paid monthly or the accumulated interest may be compounded and be paid at the maturity date with the principle amount.
Here we shall talk about the latter; and this is very similar to investing in a fixed deposit with compounding interest, however sometimes there is no guarantee of return i.e. increased risk and by the rule of high risk- high return, the interest charged is more i.e. higher return for the investor/lender.
It is advisable that the lender should consider any other expenses occurred including the platform fees/registration fees, traveling fees involved in the lending process to find the actual profit and should also consider opportunity cost before determining the interest.
There are many P2P online lending platforms where an individual can lend money to another known/unknown person.
P2P lending can provide relatively higher return to the lender and also help someone else with their financial requirements.
Some P2P lending platforms do guarantee returns however these then don't provide as high of the return. Also there are many P2P platforms which do not guarantee returns and an investor should check and make sure before lending money through them.
The most important thing to be considered is that the lending platform should be registered with RBI, then the investor should consider the charges like account maintenance charges, registration charges, platform charges etc levied by the platform. Also, the process of borrower rating by the platform should also be considered, these factors affect the risks taken and the return earned by the investor.
Yes, a P2P lending platform should be registered as an NBFC with the RBI. Investors should avoid lending through non-registered P2P platforms as the risk of fraud increases significantly.
Peer-to-peer lending is when an individual lend money to another individual who may be an unknown person on an online lending platform or to a known individual be it a relative or friend. When a peer to peer lending involves a interest being charged on the borrowed fund it can be considered as an investment made of off the principle amount that was lent and the interest earned may either be asked to be paid monthly or the accumulated interest may be compounded and be paid at the maturity date with the principle amount.
Here we shall talk about the former; and this is very similar to investing in a fixed deposit with non-compounding interest where the interest gets credited to savings account at a fixed interval of time, generally monthly, however sometimes there is no guarantee of return i.e. increased risk and by the rule of high risk- high return, the interest charged is more i.e. higher return for the investor/lender.
It is advisable that the lender should consider any other expenses occurred including the platform fees/registration fees, traveling fees involved in the lending process to find the actual profit and should also consider opportunity cost before determining the interest to be charged.
There are many P2P online lending platforms where an individual can lend money to another known/unknown person.
P2P lending can provide relatively higher return to the lender and also help someone else with their financial requirements.
Some P2P lending platforms do guarantee returns however these then don't provide as high of the return. Also there are many P2P platforms which do not guarantee returns and an investor should check and make sure before lending money through them.
The most important thing to be considered is that the lending platform should be registered with RBI, then the investor should consider the charges like account maintenance charges, registration charges, platform charges etc levied by the platform. Also, the process of borrower rating by the platform should also be considered, these factors affect the risks taken and the return earned by the investor.
Yes, a P2P lending platform should be registered as an NBFC with the RBI. Investors should avoid lending through non-registered P2P platforms as the risk of fraud increases significantly.
The full form for this is Public Provident Fund, this can be used by anyone, including a self employed individual to get a lump sum amount at the maturity of the account after 15 financial years starting from the next financial year from the investment date i.e. if an individual started the investment on 20/4/2021 the countdown for the 15 years of investment shall start from 01/4/2022. The interest rate changes every financial year and is determined by the central government. This is an investment instrument which comes under triple exempt category.
When an individual invests in these instruments an account is opened by the financial institution in which an investor can contribute up-to Rs. 1,50,000/- every year and as this comes under triple exempt category the amount doesn't come under taxable income according to ITC 80c. The interest earned is also higher than FD for most time and the interest earned also are exempted from taxes. The user can start withdrawing the amount after 15 financial years starting from the next financial year from the investment date and the withdrawals also are tax exempted.
A minimum deposit of Rs.500 per annum is compulsory, failing which the account may become inactive and reactivation charges may be levied upon reactivation. Any amount above Rs.1,50,000 shall only earn interest equal to the savings account interest.
This is an ideal investment option for those who are looking for an instrument providing tax exemptions and are risk averse. This investment instrument is extremely safe as these are backed by central government of India. However, investors with high liquidity requirements should not invest in this as premature withdrawals are not allowed in these accounts before the 7th financial year from the next financial year from the investment date that too under various conditions.
Many public and private banks provide the facility for a user to open a PPF account, but not all banks provide this facility.
post offices also provide their customers to open PPF accounts. Also, the charges are less than some banks for the same account.
Rs. 500 is the minimum deposit requirement for a PPF account.
The initial deposit needs to be for Rs.500 or more which needs to be a multiple of Rs.50. Any following deposit amount less than Rs.50 is not allowed and any deposit should be made in the multiple of Rs. 50 only.
Click on the above link to go to the page from NSI website providing more information on PPF account rules and regulations.
Click on the link above to go to official website of NSI
A Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month for a fixed tenure and earn interest at a predetermined rate. It's a great option for disciplined savers who want guaranteed returns with small monthly contributions. The interest gets paid at maturity along with the principle invested amounts. This can be invested in by individuals who want to regularly save their money for a future date as this also provides a higher rate of interest as compared to savings account. Partial and early withdrawals are also generally allowed by most financial institutions however they may charge a penalty resulting in a lower interest rate. This investment instrument is ideal for those who have hard time saving money as the contribution amount gets debited from the savings account every month on a particular date thus an individual can choose the contribution date to be the next day from the salary payment thus ensuring regular saving.
Recurring Deposits (RDs) let you invest small amounts regularly (usually monthly) for a fixed term—from as low as ₹100 or 500 per month up to 10 years. The interest rate is fixed and compounded quarterly, and on maturity, you receive the principal plus accumulated interest. Penalties apply for delayed or premature withdrawal.
Step-by-step RD account opening on HDFC Bank via Net Banking or branch
Many NBFCs and small finance banks offer RD schemes similar to banks, often with flexible tenure and slightly higher interest rates. The account can be opened online by completing KYC and setting up auto-debits from a linked account.
Real estate includes land or any envelopment done to it including building a house, building a shop, building a boundary wall etc. The price of the real estate depends upon it's demand in the market and the profit is realized on the same of the property, however, it is advised that the investor should consider all the cost incurred for buying the property including registry fees, legal fees, opportunity cost etc involved during the purchasing and selling process.
The investor should also consider all the incomes, if any, like rental income, when calculating the return from a real estate. Another very important benefit of investing in a real estate is that most financial institutions accept real estate as a security for loan, thus an individual can get a loan against their real estate and save themselves from paying high interest charged for non-secured loans. InnFinn provides an option to actively and accurately account for all the above mentioned points and also calculate returns for the users.
There are many online platforms which allow users to invest in a real estate inside or outside their current city.
Many real estate sellers nowadays provide an option to take part ownership of a property and when these are sold the profits are shared among the investors in a per-determined proportion. This allows people with relatively lower investment capacity to also take advantage of real estate trading profits.
An investor can contact real estate agents to invest in this instruments.
Real estate market are regulated by RERA (Real Estate Regulation and development Act) however an investor should always be cautious while buying any property and check for all the documents.
No, the price of the real estate depends upon the demand of the property in the market thus if the demand for it decreases with time due to any reason including reason like water logging, increase in crime rate in the area, new liqueur shop in the area, change in demography etc can affect the price of the property.
Real estate is best for long term investment as the development of an area is a time taking process thus requiring long time for the price to appreciate. Short term investments should be avoided as the price increment in short term may not even cover the tax and other expenses incurred for purchasing the real estate.
The location of the property should be close to a public transport, should be located in a area with low crime rate, should not have illegal encroachment problem are some of the important factors to consider before buying any real estate.
Savings accounts are the most common high liquidity instrument. They allow you to deposit and withdraw funds anytime while earning interest (usually 2–4% p.a.). They are suitable for emergency funds and daily transactions.
Choose your bank (e.g., SBI, HDFC) and open a savings account via their website or branch. Monitor interest accrual—typically around 2.5–2.75%.
Visit your nearest post office or their site to open a savings account. India Post offers a secure, widely accessible option, regulated by government norms. Reference: (General knowledge; no citation needed here.)
Investing in stocks, also called shares, allows you to be part-owner of a company. To simplify this complex instrument, through stock a company sells a part of it's ownership to the share/stockholder in exchange of their money. The company then uses the invested money to purchase assets which they believe would increase their financial position in the future. This can be done through market expansion or paying off existing debt.
Through shares/stocks, the investor may also get a share of the profit earned by the company, this is called dividends. However, a company is not liable to share their profit every year and may choose to retain their profits for future use. As the financial condition of a company improves with time the price of the shares/stock of the company also increases as the company becomes more lucrative for the investors. This in turn increases the demand for the shares/stock of the company in the market further increasing the price of the share/stock in the market. Because of this increase in the price of the share/stock in the market the share holder experiences capital gains and if the investor sells his stocks/shares in an increased price he experiences capital gains. The increase or decrease of the price of a share/stock also depends upon the public perception of the future financial performance of the company i.e. if people believe that a current decision made by the company may increase the profit of the company in the future then they would want to invest in that company. Thus the profit or loss from investment depends upon the financial performance of a company and also the public perception of the future performance of the company in the market. Thus the return from a stock is based upon the current financial performance of the company due to the past decision taken by its management and also on the current decisions by the management which is believed to make profits for the company.
Stock brokers are SEBI registered individuals/institutions which can invest on behalf of another individuals in stocks. Stock brokers also facilitate investment in stocks by providing various data related to the the stocks like current price of the stock in the market, historical price of the stock, financial conditions of the company, news related to the management decision of a company etc.
Some banks also provide stock broker services through which their customer can invest in stocks/shares. Some banks even provide 3 in 1 account through which an individual can earn interest on non-invested amount also.
No income tax has to be paid on capital gains which has not been realized, i.e. the shares/stock was not sold to register a monetary profit.
No, the hard copy i.e. physical shares needs to be first de-materialized to register it to a new name.
This is an alternative to regular term insurance plans where the insurance premium paid does not get refunded to the investor. In addition to the refund of premium paid, the insurance companies also provide other benefits like vested compound reversionary bonus, terminal bonus etc because of which the investor also get additional money over the invested amount making this as a investment option. The premium paid are refunded as regular income post the policy maturity and thus are preferred by people who would like to have regular reliable income.
This instrument provide the advantage of an investment and insurance however no interest is paid on the premium amount and the maturity term can also be for a long term thus investors must also consider the effect of inflation of the premium being refunded. Another big thing to consider before investing in such instruments is the premium payment term, the premium has to be paid regularly and failing to do so would affect the various bonuses at the time of maturity thus affecting the return of the investment. Failing to pay premium may also result in fines or lapse of the policy thus this is not ideal for people with professions where income is not guaranteed like businessmen, commission agents etc.
Most insurance companies provide online and offline facilities to invest in this.
IRDAI regulates all the insurance companies thus they can be approached for issues ralated to the same.
The cash outflows happen every year for a fixed amount of time according to the insurance policy documents. Then after the premium payment policy the regular income shall start and at the maturity date bonuses shall also be added to the income amount.
Voluntary Provident Fund is a part of EPF/EPS investment instrument where an employee can increase his share of contribution to more than 12% of his Basic+DA salary. An employee can contribute upto 100% of his Basic+DA through VPF however, it is to be kept in mind that any interest earned above Rs. 2.5 lakhs in a year is taxable. Also, one must know that the employer contribution does not increases by increasing employee contribution and remains at 12% of the employee's Basic+DA.
Only an employee who has a EPF/EPS account can invest in this through his company.
Premature withdrawals are only allowed for situations like medical emergency, marriage of child, unemployment etc also a premature withdrawal may result in extra income tax.
Yes, lump-sum amount can be withdrawn after the retirement of the employee. All the rules of EPF contribution is applicable for the same.
Zero-coupon bonds, also called No-coupon bonds are debt instruments, i.e. by purchasing a bond the investor is lending the money to the bond issuing institution, be it central government, state government, municipal bodies or a corporate house. This is also a liability for the issuing institution, however these bonds do not provide regular coupon payments, instead their maturity value (also called face value or Par value) is more than the issuing price thus, the user gets a lump-sum return at the maturity date.
An investor can invest in these through the primary markets or from the secondary markets. If bought from the primary market the issuing price shall be the cost per bond whereas in the secondary market it's price shall depend on it's demand in the market. The demand in the market depends on the current borrowing rate in the market for the similar rated bonds, if the bond provide more return than a similarly rated bond its demand would go up increasing it's price per bond; in such scenario the bond is said to be trading at premium. When the bond provide lower return than a similarly rated bond its demand goes down and the bond would trade at a lower price than the issuing price, in this scenario the bond is said to be trading at a discount.
Zero-Coupon Bonds generally are issued for a long term and thus should be invested by those who shall be ok with not getting any cash flow till maturity, specially when they are investing through the primary markets. The long term nature of such bonds make it less desirable for the investors as these are more prone to uncertainties in the markets and this may also impact the price of the bond when selling it in the secondary markets. However these are safe investment instruments and also provide a relatively higher interest and some may even provide tax benefits, thus making these very desirable for investors finding a better substitute for Fixed Deposits. Some financial institutions also accepts these as a collateral/security for loans.
An investor can buy Zero Coupon bond in the secondary market from Bondcart website.
Yes, SEBI regulates all the genuine bond brokers very much like the stock brokers.
Bond brokers are like stock brokers, i.e. people/institutions who are an intermediary between the buyers/investors and sellers/issuers of bonds.
It provides the information about the current financial condition of the issuer company. These ratings may change from time to time and would affect the price of the bond in the secondary market.
Because there is a possibility that the financial condition of the issuer changes in the future which shall be indicated through it's rating.
Understand how different investment instruments compare in terms of returns, risk and other factors
| Instrument | Returns | Risk | Liquidity | Tax Efficiency | Inflation Hedge |
|---|---|---|---|---|---|
| EPF | 8–8.5% | Low | Low | ||
| NPS | 9–12% | Medium | Low | ||
| Mutual Funds | 7–15% | Medium-High | High | ||
| Stocks | 12–18% | High | High | ||
| Fixed Deposits | 5–7% | Low | Medium | ||
| Gold | 8–10% | Medium | High | ||
| Real Estate | 8–12% | Medium-High | Low–Medium | ||
| Bonds | 6–9% | Low–Medium | Medium | ||
| PPF | 7.1–7.5% | Low | Low | ||
| ULIPs | 6–12% | Medium | Low | ||
| Cryptocurrency | 15–100+% | Very High | High |
InnFinn helps you monitor EPF, NPS, mutual funds, stocks and other investments with inflation-adjusted projections to show the real value of your money over time.
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