2. NATIONAL SAVING CERTIFICATE (NSC)
• Eligibility : Can be opened by Resident Indian individuals.
• Liquidity : It has a lock-in period of 5 years.
• Rate of Interest : Current interest rate is 7 % p.a.
• Investment limit: Minimum of Rs. 1000/- and in multiples of
Rs. 100/- No Maximum Limit (However tax deduction is
capped at 1.5 Lakh
• Tax Treatment : Interest earned is taxable
• Risk : Low risk
3. TAX SAVING FD
• Eligibility : Can be opened by Resident Indian individuals.
• Liquidity : It has a lock-in period of 5 years.
• Rate of Interest : 6.25% p.a. to 7.60% P.A.
• Investment limit: Minimum of Rs. 100/- No Maximum Limit
(However tax deduction is capped at 1.5 Lakh
• Tax Treatment : Interest earned is taxable
• Risk : Low risk
4. PUBLIC PROVIDENT FUND (PPF)
• Eligibility : Can be opened by Resident Indian individuals,
salaried and non-salaried individuals. A HUF cannot open a PPF
account.
• Liquidity : Lock-in period of 15 years, but can be further
extended by 5 years. Partial withdrawals are allowed after 7
years
• Rate of Interest : 7.1% P.A.
• Investment limit: Minimum of Rs. 500, Maximum Limit is 1.5
Lakh
• Tax Treatment : Interest earned is tax-free.
• Risk : Low risk
5. EMPLOYEE PROVIDENT FUND (EPF)
• Eligibility : Can be opened by employee with basic salary greater
than 15,000 /month
• Liquidity : Can withdraw PF balance after 2 months of leaving job
and does not take up employment within two months with an
employer covered by PF Act.
• Rate of Interest : 8.1% P.A.
• Investment limit: Both employer and employee have to contribute a
minimum 12% of Basic Pay + D.A
• Tax Treatment : Entire PF balance (including interest) is tax-free, if
withdrawn after continuous service of 5 years. However, if EPF /VPF
contribution is above Rs. 2.5 lakh in any year, the interest earned on
such excess contribution is now taxable, however, the limit is
increased to Rs 5 lakh where the employer has not contributed to
the fund (i.e. for government employees).
6. NATIONAL PENSION SYSTEM (NPS)
• Eligibility : Can be opened by every Indian citizen between the
age of 18 and 60
• Liquidity : Partial withdrawals are allowed after 10 years but
under special conditions.
• Rate of Interest : It is linked to market, however 7% - 14% can
be the return based on market condition & investment
instrument type
• Investment limit: No max limit, however tax deductions is
capped at Rs. 50,000 over & above 1.5 Lakh under 80C
• Tax Treatment : Employer contributions are tax-free, subject
to 10% of the basic salary and dearness allowance (14% in case
of Central/state government employees).
7. UNIT LINKED INSURANCE PLANS (ULIP)
• Eligibility : Can be opened by every Indian citizen between the
age of 18 and 60
• Liquidity : Min 5 years of lock-in
• Rate of Interest : It is linked to market, however 7% - 14% can
be the return based on market condition.
• Investment limit: No Maximum Limit (However tax deduction is
capped at 1.5 Lakh)
• Tax Treatment : Investment and withdrawals & maturity
amount are tax-free. But if the annual premium exceeds Rs 2.5
lakh in any year during the term of the policy, then proceeds of
such ULIPs shall be taxable
• Risk : High
8. EQUITY LINKED SAVINGS SCHEME (ELSS)
• Eligibility : Can be opened by Resident Indian individuals.
• Liquidity : Min 3 years of lock-in
• Rate of Interest : It is linked to market, however 7% - 14% can
be the return based on market condition.
• Investment limit: No Maximum Limit (However tax deduction is
capped at 1.5 Lakh)
• Tax Treatment : If the returns on investment are greater than
Rs. 1 lakh, they are charged tax at 10% under LTCG.
• Risk : High
• Suggested ELSS: Canara Robeco Equity Tax Saver Fund -
Regular Plan – Growth ( 3, 5 & 10 years returns are15.48%,
14.01%, 14.7% respectively)
9. SUKANYA SAMRIDDHI YOJANA (SSY)
• Eligibility : Parents/guardians can open an account in the name
of a girl child till she attains the age of 10 years up to 2 girl
child
• Liquidity : Maturity period is 21 years, however up to 50% of
the deposit amount can be prematurely withdrawn once the
girl reaches the age of 18 years.
• Rate of Interest : 7.6%
• Investment limit: Minimum Rs. 250 & Maximum Limit is 1.5
Lakh for 15 years.
• Tax Treatment : Returns are tax free
• Risk : Low
10. SENIOR CITIZEN SAVINGS SCHEME (SCSS)
• Eligibility
• Senior citizens of India aged 60 years or above.
• Citizens who have opted for the Voluntary Retirement Scheme (VRS) or
Superannuation and in the age bracket of 55-60 years
• Retired defense personnel above 50 years of age and below 60 years of age.
• HUFs and NRIs are not allowed to invest in this scheme.
• The investment has to be done within a month from the date of receiving the
retirement benefits
• Liquidity : Lock-in of 5 years, can be extended to 3 years, can be
prematurely closed
• Rate of Interest : 8% p.a. This interest rate is applicable from 1st
January 2023 until 31st March 2023
• Investment limit: Min Rs. 1000 & in the multiple of 1000 up to 30
lakh.
11. Investment
options
Interest (% PA) Minimum lock-in
period (Years)
Assured return Associated risk
NSC 7 5 Yes Low
FD 6.25- 7.6 5 Yes Low
PPF 7.1 15 Yes Low
EPF 8.1 2 Month after
leaving job
Yes Low
NPS 7-14 Till the age of
retirement
No Medium to high
ULIP 7-14 5 No High
ELSS 7-14 3 No High
SSY 7.6 21 Yes Low
SCSS 8 5, Can be
extended to 3
Yes Low
SUMMARY
