- Minimum investment :Rs. 500
- Can be opened easily through your bank.
- Lock-in period :3 years
- LTCG > Rs.1 Lakh will be taxable at 10%. (Partially Taxable).
- In case of dividend option- Dividend received is Tax free.
|Public Provident Fund (PPF)|
- Initial investment : Rs. 100.
- Minimum annual deposit : Rs. 500
- Can be opened online or offline at your closest bank branch/post office.
- An easy investment to make but it demands maintenance.
|Interest is Tax free|
|Senior Citizen’s Saving Scheme|
- Investment in multiples of Rs. 1000 (upto a maximum of Rs. 15 lacs) at any bank or post office branch.
- No additional deposits are required to maintain the account.
- Premature termination is allowed after a year at a penalty of 1.5%. This makes the investment easy to open and maintain.
|Sukanya Samridhi Yojana|
- Account can be opened anytime after a girl child is born but before she turns 10 years.
- Minimum yearly deposit : Rs. 1000 (which can also be made in multiples of 100 through the year).
- Not flexible in terms of withdrawal.
- Investment period : 15 years the maturity technically is 21 years from investment.
- Practically however, the entire amount can be withdrawn easily when the girl child turns 21.
|Interest earned is Tax free.|
|National Pension Scheme|
- Minimum Investment : Rs. 500 but an annual contribution of Rs. 6000 (towards Tier 1) is required to maintain the account thereafter. If that is not an issue then, the NPS is a moderately easy type of investment to make and maintain.
- Tier 1 cannot be withdrawn till 60 years of age. (Or only 20% can be withdrawn with the balance 80% having to be invested in a pension product)
- Tier 2 is fully withdraw-able at any time with no penalty attached making it a very liquid investment. You can’t open a Tier 2 without having a Tier 1 account.Rs. 500
- Do note: even after getting a deduction of Rs. 1.5 lacs u/s 80C, contributor can get a further deduction of Rs. 50,000 u/s 80CCD(1B) and further deduction if employer makes contribution upto 10% of basic salary and dearness allowance u/s 80CCD(2).
- You cannot withdraw the entire amount after retirement.
- 40% must be kept aside to receive as regular pension.
- Of the remaining 60% amount(if withdrawn), 40% is Tax Free and remaining 20% is taxable(as per slab rates)- Partially Taxable.
|Unit Linked Insurance Policies (ULIPs)|
- Lock-in period: 5 years
- ULIPs have undergone a massive transformation. While charge heads remain the same (i.e. Premium allocation charge, policy admin charge, fund management charge, mortality charge, surrender charge, switching charge, discontinuance charge), there has been a significant reduction in these.
|Tax Exemption on investment, accrual and maturity.|
|National Saving Certificates (NSCs)|
- Minimum investment: Rs. 100.
- Can be opened at any Post Office
- No maintenance is required.
- Premature withdrawal is allowed only in case of death or a court order.
- Accrued Interest on NSC qualifies for Section 80C deduction.
- Interest on NSC is taxable as per slab rates.
- With digitisation, pension plans have become easy to purchase.
- Ease of maintaining and withdrawal of funds defers from plan to plan.
- Only 33% of the corpus is Tax-free on maturity
- 66% of the corpus of pension plan is taxable.
|Bank Fixed Deposits (FDs)|
- Minimum Investment: Rs. 1000
- An extremely easy investment to make
|Interest Income from fixed deposits (FD's) is fully taxable|
|Traditional Insurance policies (excluding Term Insurance)|
- While buying a traditional insurance policy is extremely easy, premium payments needs to be maintained in order to avoid the policy lapsing.
- Since these policies are for a very long term, maintenance of the same can prove to be difficult.
|Any amount, which is received at the time of maturity, is exempt from tax u/s 10(10D).|