The interest rate has been reduced on PPF account in March 2016 and this was the biggest disappointment news for all investors in India. The Govt. of India announced that the exiting rate of interest has been reduced from 8.7 percent to 8.1. However they do rolled back their decision of tax on EPF after big voice of common people on social media.
Now another update is that now onward the interest rates on all saving scheme (that comes under Govt. of India) will be revised in every 3 month of time. That means there wont be any fixed interest rates on PPF or EFP or NSC (www.indiapost.gov.in/NSC.aspx) or any other govt bond schemes. And this will directly going to impact on common people saving.
So now the question is how we are going to save our hard earned money after paying several tax. We have only these kinds of schemes that provide us higher returns and now that has been reduced.
So what’s the solution?
After several research and analysis I found that there are still few investment opportunists available in market that can provide much higher returns as compared to traditional PPF account. However they are are not as much secured as traditional accounts. But if you wanted to invest in it for a year of 2 then you can go ahead, and that’s my personal idea.
Other Investment Options?
Once the interest rates have been reduced in majority of the Govt. instruments and schemes, it is now time to explore other opportunities that can provide better returns.
So what are those schemes?
Well, before clearing the cloud on these investment ideas, make sure to do you own research before you decide to put you money.
There are NCD available in market and time to time big companies do announce for the upcoming NCDs. The best part about these NCDs are:
- Locking period is less
- Locking period starts from 1 year to 6 years.
- You can opt for either monthly interest payout or annually or at maturity.
- Can invest via Demat account.
- Easy to invest
- Amount will be directly credited back to your given bank account on maturity date.
- Provide higher returns
- Peace of mind, not much trick applicable.
- Just invest and relax
- Can check investment amount online via Demat account.
So what are those schemes? How can i invest?
Well, I will give answers of your all queries, here is the list of few popular NCD (non-convertible debentures) that is currently providing much better returns:
|Muthoot Finance NCD
||9.50 to 10.00 %
|IFCI Ltd NCD
||9.30 to 9.40 %
|ECL Finance Ltd NCD
||10 to 10.60%
Few of my friends invested in Muthoot Finance NCD and getting better returns (at least as compared to PPF or even normal fixed deposit). You can find the updated NCD interest rates of Muthoot Finance here – http://muthootfinance.com/assets/uploads/NCDData-14.pdf
These are Giant companies however you should do you own homework before you do invest on these NCDs.
The other option is to invest in fixed deposit in Banks however their returns are pretty less. But your money is secured and can easily take out from FD whenever required. Unlike Govt. Schemes and NCD, your money is sealed packed and withdraw is BIG NO.
So – what is the conclusion?
PPF is still a good investment option and should be consider for long time investment option and as a retirement fund. Moreover this also allow you to save some amount from tax which is good for common people.
You can check my FD Calculator (India) that i created for the investors who wanted to invest via fixed deposit in govt. and private sectors bank.