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Where to invest provident fund

Sandeep Jain (2 Points)

16 October 2018

Best investment scheme for investing provident fund money

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Aman Khanna (Finance Advisior) (196 Points)
Replied 18 October 2018

Provident Funds, also known as Employee Provident Fund is one of the major retirement funds one gets at the time of retirement. These can also include Gratuity, Superannuation, Voluntary Retirement, etc. People invest in it because it is one of the safest and the most tax-efficient investment option.

Once these funds have been received there are a number of options where the provident funds can be invested. The include mutual funds, debts funds, and real estate to name a few. They offer great returns on investment. However, these returns can only be expected if the market is doing well as such financial instruments are dependent on the dynamics of the market. Thus, if the markets are not doing well, then chances are that not only will you not get a good return, in severe circumstances, the money invested can even be wiped out.

These investment options are thus full of risks.

However, if you are looking for an investment option where your invested amount will remain safe and you will get guaranteed returns as promised, then Fixed Deposits (FDs) are the option to go for. They offer 8.75% interest rates, which can go up by another 0.35% if you are a senior citizen which makes it highly attractive for individuals who have retired.

The entire process including the documentation which involves KYC documents and photographs is done online. The lenders even provide an FD calculator to those investing in FD so that they can find out the amount which they stand to receive at the end of maturity. The tenor can be chosen by the applicant as per her/his preference.

So, if you are looking for a safe investment option for your retirement funds, you should invest in fixed deposits.