In today's global market a lot of instruments for investment are available. Every instrument has its own distinct features viz, Interest rates, Tax benefits etc.
This article helps you all in selecting and investing in different Fixed Income Instruments.
I am not going into detail as every one of you knows about them and i am just making a comparison on them to reach at conclusion in short.
| Public Provident Fund |
National Saving Certificate |
Kisan Vikas Patra |
Monthly Income Schemes |
Post Office Term Deposits |
Bank Term Deposits |
|
| Interest Rate |
8% |
8% |
8.40% |
8%* |
6.25%-7.50% |
6%-7.75%** |
| Interest payout |
Yearly |
Hyly |
Qtrly |
Monthly |
Qtly |
Qtly/Hyly/Yrly/On Maturity |
| Tenure |
15 Yrs. |
6 Yrs. |
8 Yrs. 7 Months |
6 Yrs. |
1-5 Yrs. |
15 days-10 Yrs. |
| Minimum Investment |
Rs. 500 every year |
Rs. 100 |
Rs. 100 |
Rs. 1500 |
Rs. 200 |
Rs. 100 |
| Maximum Investment |
Rs. 70000 |
No Limit |
No Limit | Rs. 4.5 lakh*** |
No Limit | No Limit |
| Premature Withdrawl^ |
Allowed |
Not Allowed | Allowed | Allowed | Allowed | Allowed |
| Tax Benefit |
Under 80C |
Under 80C | Not Available |
Not Available |
Under 80C | Under 80C**** |
| Tax On Interest Income |
Tax Free |
Taxable |
Taxable | Taxable | Taxable | Taxable# |
* Additional 5% Bonus on maturity.
** Rate for deposits maturing within 3-5 yrs. for major banks.
*** In case of individual and 9 lakh if hold jointly.
**** If the maturity period of term deposit is 5 yrs. and above.
^ It fetches some cost either in the form of deduction in principal amount or reduction in interest income.
# TDS is cut above Rs. 10,000 in case of bank FD's while no TDS is cut for rest all.
HOPE U LIKE IT.
CAclubindia
