What are the types of fixed-income plans?
What's the story
Navigating India's financial landscape can be tricky, especially when it comes to choosing the right investment plans. Fixed-income plans are a popular choice for those looking for stability and predictable returns. However, with so many options available, it is important to know which ones are worth your time and money. Here are five fixed-income plans that deserve your attention in India.
#1
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a long-term savings scheme backed by the government. It has a tenure of 15 years, and offers tax benefits under Section 80C of the Income Tax Act. The current interest rate is around 7.1%, which is revised quarterly. The minimum investment required is ₹500 per year, while the maximum is ₹1.5 lakh per year.
#2
National Savings Certificate (NSC)
The National Savings Certificate (NSC) is a popular fixed-income investment option with a tenure of five years. It comes with a fixed interest rate of around 6.8%, compounded annually. It is also eligible for tax deductions under Section 80C, making it an attractive option for tax-saving purposes. The minimum investment amount starts at ₹1,000, with no upper limit.
#3
Senior Citizens Savings Scheme (SCSS)
The Senior Citizens Savings Scheme (SCSS) is specifically for senior citizens aged 60 years and above, or those who have retired on superannuation at the age of 55 years or above. The scheme has a three-year tenure with an interest rate of around 8.2%, paid quarterly. The minimum investment is ₹1,000, and the maximum limit is ₹15 lakh.
#4
Fixed deposits (FDs)
Fixed deposits (FDs) are offered by banks and financial institutions for various tenures ranging from seven days to 10 years or more. They offer guaranteed returns based on the deposit amount and tenure chosen by investors. The rates vary between different banks but generally range between 6% to 8% per annum, depending on market conditions.
#5
Post Office Monthly Income Scheme (POMIS)
The Post Office Monthly Income Scheme (POMIS) provides regular monthly income through interest payments at around 6.6% per annum, for a tenure of five years. Investors can open accounts with a minimum deposit of ₹1,500 and a maximum of ₹4.5 lakh for single accounts or ₹9 lakh for joint accounts, ensuring steady returns without market risks.