Contributions to the Employees’ Provident Fund (EPF) is a mandatory investment that automatically happens if you work in a company covered under the EPF Act. The interest you earn on your EPF contributions is exempt from tax and fixed annually by the Employees’ Provident Fund Organisation (EPFO) in consultation with the government. Voluntary Provident Fund (VPF) benefits are exclusively available to EPF-covered salaried employees. EPF and VPF have the same regulations. This amount will be taken from your pay, lowering your take-home pay.Interest rate offered: 8.1% for 2021-22. Maximum investment amount: Up to 100% of basic salary and DAHow to invest: Employee needs to inform his employer by submitting the same in a prescribed format and employer then has to start deduction of the same.Tenure: Same as EPF
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Public Provident Fund (PPF)
PPF can be invested by any Indian resident, whether salaried, self-employed, or even a housewife. Individuals can also register a PPF account on behalf of their minor children. The interest is calculated on a monthly basis but credited annually under this system.Interest rate offered: 7.1% (for April-June 2022 quarter)Maximum investment amount: Rs 1.5 lakh in a financial yearHow to invest: You can invest via banks, post office, and even using your Internet banking.Tenure: 15 years
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5-year National Savings Certificate VIII Issue
The interest is compounded once a year, reinvested, and paid at maturity. You can take out a loan against your certificates.Interest rate offered: 6.8% (for April- June 2022 quarter)Maximum investment amount: No limit but tax benefit is available only up to Rs 1.5 lakh under Section 80C.How to invest: One can buy NSC certificates from any post officeTenure: 5 years
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5-year tax-saving fixed deposits
In the hands of the investors, the interest earned on these FDs is taxable. Keep in mind that you can’t borrow against these fixed deposits or cash them out before the five-year period is up.Interest rate offered: POTD: 6.7% (for April-June 2022 quarter).Banks: Varies from bank to bankMaximum investment amount: Up to Rs 1.5 lakhHow to invest: One can visit either a bank branch or post office. You can also do the same via internet banking.Tenure: 5 years
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Sukanya Samriddhi Account
You can only invest in this scheme if you have a daughter. The account can be opened at any point between her birth and the age of ten. You can only have two girl children per account, and you can’t have two accounts for one girl.Interest rate offered: 7.6% (for April-June 2022 quarter)Maximum investment amount: Rs 1. 5 lakh in a financial yearHow to invest: Account can be opened with at post office or authorised bank branchesTenure: Subject to specific criteria, the account matures after 21 years from the date of opening or when the girl child marries, whichever comes first.
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Senior Citizens Savings Scheme
This scheme is only available to older citizens. The scheme also provides quarterly interest payments, which can be used to supplement their income. The account can be extended for three years after it matures.Interest rate offered: 7.4% paid quarterly (for April-June 2022 quarter)Maximum investment amount: Rs 15 lakh. Tax benefit under section 80C is available up to Rs 1.5 lakh.How to invest: Investment can be made at authorised post office or bank branches.Tenure: 5 years. Post maturity, account can be extended by 3 years.
