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Financial Basics - Investment Options

This document provides an overview of several popular investment options in India, including fixed deposits, public provident funds (PPF), equity linked saving schemes (ELSS), and Sukanya Samriddhi Yojna accounts. Fixed deposits offer guaranteed returns but have penalties for early withdrawal. PPF accounts provide tax-free returns over 15 years and can be used for education or marriage expenses. ELSS funds have a 3-year lock-in period but offer tax deductions under Section 80C. Sukanya Samriddhi Yojna aims to support the education and marriage of girl children with tax-free returns over 21 years.

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Sajeed Shaikh
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52 views7 pages

Financial Basics - Investment Options

This document provides an overview of several popular investment options in India, including fixed deposits, public provident funds (PPF), equity linked saving schemes (ELSS), and Sukanya Samriddhi Yojna accounts. Fixed deposits offer guaranteed returns but have penalties for early withdrawal. PPF accounts provide tax-free returns over 15 years and can be used for education or marriage expenses. ELSS funds have a 3-year lock-in period but offer tax deductions under Section 80C. Sukanya Samriddhi Yojna aims to support the education and marriage of girl children with tax-free returns over 21 years.

Uploaded by

Sajeed Shaikh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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FINANCIAL BASICS INVESTMENT

OPTIONS

INVESTMENT OPTIONS

Lets look at a few investment


options:
Fixed Deposit(FD)
Public Provident Fund(PPF)
Equity Linked Saving Scheme(ELSS)
Sukanya Samriddhi Yojna

INVESTMENT OPTIONS FIXED DEPOSIT


Afixed deposit(FD) is afinancial
instrumentprovided by banks which
provides investors with a higher rate
ofinterestthan a regularsavings
account, until the given maturity

Advantages
Dis-Advantage
date.
1

Investing in fixed deposit has


also some benefits like the risk
of not losing money.

Another best part of investing


in fixed deposit scheme is that
you can take loan by keeping it
as security.

Low Risk as compared to Risk


Involved in Stocks.

Interest rate of fixed deposit


is traditionally fixed during
the entire tenure of the
deposit. When market
interest rate goes up, you
will not be getting higher
interest rate based on this
movement.
The interest on fixed
deposit is more than 10000
rupees then bank has to
compulsorily deduct TDS
from it.
The major drawback of
investing in fixed deposit is
penalty for early
withdrawals.

SBI Interest Rates for the year


2016-2017

INVESTMENT OPTIONS PUBLIC PROVIDENT FUND(PPF)


The Public Provident Fund (PPF) Scheme, is
a tax-free savings instrument. Interest
earned on deposits in the PPF account are
not taxable. Deposits made towards PPF
accounts can be claimed as tax
Key Features of the PPF Scheme
deductions.
Interest rates:Interest earned is compounded yearly. (The
current rate of interest on a PPF account is fixed at 8.1% p.a.)
Tenure:15 years; account continuance is allowed beyond
maturity for 5 years at every renewal.
Initial investment/deposit:Rs.100 to open the account
Annual Deposit amount:Rs.500 - Rs.1.5 lakhs per year.
Deposit frequency:A deposit has to be made every year,
for 15 years, to keep the account active.
Withdrawals:Partial premature withdrawals can be made
every year from year 7.Complete withdrawal of funds can be
made only at maturity.
Tax advantages:Interests are tax-free and deposited
amounts are tax deductible U/S 80C of the Income Tax Act.
Loan facility:Loans can be availed against funds held in the
PPF account from year 3 to year 6.

INVESTMENT OPTIONSEQUITY LINKED SAVING


SCHEME(ELSS)
AnELSSis a diversified equity
mutual fund which has a majority of
the corpus invested in equities.
Since it is an equity fund, returns
from anELSSfund reflect returns
from the equity markets. This type
of mutual fund has a lock in period
of
3 years
from offer
the date
These
funds
taxofbenefits
investment.
(Individual /HUF) under Section
80C of Income Tax Act, 1961
according to which, investment
up to Rs 1.5 lakh in ELSS is
deductible from taxable income.

INVESTMENT OPTIONS SUKANYA SAMRIDDHI YOJNA


TheSukanya Samriddhi Yojanais as girl
child prosperity SSY account is to ensure a
bright future for girl children in India.
Thisyojanais to facilitate them proper
education and carefree marriage expenses
Maximum number of accounts:Upto two girl children
or three in case of twin girls as second birth or the first
birth itself results in three girl children
Minimum and Maximum Amount of
Deposit:Min.1000 of initial deposit with multiple of one
hundred rupees thereafter with annual ceiling of
Rs.150000 in a financial year
Tenure of the Deposit:21 years from the date of
opening of the account
Maximum period upto which deposits can be
made:14 years from the date of opening of the
account.
Interest on Deposit:compounded annually with option
for monthly interest pay-outs to be calculated on balance
in completed thousands. ( Current rate 8.60%w.e.f 1st
April, 2016)
Tax Rebate:As applicable under section 80C of the IT

THANK
YOU

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