By |17 Sep 2023 at 10:31 AM
Savings Scheme

Savings Scheme: Public Provident Fund, Mutual Funds, and Post Office Savings Schemes (POSS) investments can yield attractive returns. Mutual funds carry a higher risk because they are directly linked to market volatility, whereas PPF and POSS investments offer guaranteed returns.

Long-term wealth creation is most effectively accomplished through consistent investment. With so many investment options available on the market, it may be difficult to determine which investment options offer the highest returns and best suit your needs. Public Provident Fund (PPF), Mutual Funds (MF), and the Post Office Savings Scheme (POSS) are some of the finest investment plans that provide substantial returns.

Choosing the correct investment option depends on your investment goal and risk appetite. Let’s examine these investment opportunities in depth.

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PPF: Public Provident Fund

A Public Provident Fund is a government-backed investment vehicle that provides returns that are guaranteed. It operates on the principle of small savings and encourages disciplined saving in order to develop a corpus fund over time. A PPF account accrues annual interest of 7.1%. The investment is more secure than other options because it is supported by the Indian government. However, these investments have a 15-year lock-in period, which may be prohibitively long for investors seeking quick returns.

Section 80C of the Income Tax Act of 1961 permits tax deductions of up to Rs 1.5 lakhs per year for PPF investments.

MF: Mutual funds

Mutual funds are investment vehicles whose primary function is to invest money in the equity or stock market. They offer higher returns than other investment opportunities, such as the PPF and Post Office savings. However, the lucrative returns are subject to market volatility and carry a greater degree of danger. In the event of a market collapse or other unfavorable circumstances, a person may lose their money. However, mutual fund administrators attempt to minimize risk by investing your money in numerous stock market sectors.

Mutual funds offer greater liquidity than other options because you can trade your investments to liquidate returns immediately.

POSS: Post Office Savings Schemes

The Post Office Savings Schemes (POSS) comprise a variety of investment options that primarily cater to small-dollar investors. POSS seeks to provide investors with risk-free and assured returns. Post Office Savings Account, Post Office Monthly Income Scheme Account, Post Office Time Deposit Account, Senior Citizen Savings Scheme (SCSS), and National Savings Certificates are among the investment options listed. These options offer returns based on various interest rates.

Section 80C permits tax deductions of up to Rs 1.5 lakh per year for investments in Post Office Savings Schemes.