These are best top 3 ways that you can use to invest / grow you money.
The best part? I use them as well.
Trust me you won't be disappointed after reading this. Take your step towards secure / best returns investment now because i've taken mine.
- Liquid Funds
- Sovereign gold bonds (SGBs)
- Public Provident Fund (PPF)
- Liquid Funds
What are Liquid Funds?
Liquid funds are high liquidity open-ended income schemes that invest in debt and money market instruments such as government securities, treasury bills and call money among others. These instruments have a maximum maturity period of 91 days and are considered safe because they mitigate interest rate volatility risk.
Investments made in Liquid funds are only in short term securities, it's market value does not respond much when interest rates change in the market. This means that liquid funds do not have significant capital gains or losses.
Taxation: Liquid funds are subject to taxation applicable to debt funds. If the liquid fund investment is held for more than three years, it is subject to long term capital gains which is taxable at 20% with indexation. If the investment is held for three years or less than that, the capital gain is taxed at the marginal (highest) tax slab rate applicable to the person who has invested.
The Best Part? - Better than FD (Fixed Deposits)
Liquid funds offer returns of 6.89%, compared to 7 per cent offered by most bank fixed deposits. Liquid funds are least risky among debt mutual funds and they have the potential to offer marginally higher returns than bank deposits as the returns are linked to the market.
You can also invest in Liquid funds through SIP mode. These funds lend to good companies and for a short period of time (Up to 91 days). And, this construct means the risk of making a loss on these funds is nearly zero.
Which app should i use to start investing in Liquid Funds?
PhonePe - You may Refer this tutorial to learn process of investing in Liquid Funds on PhonePe.
- Sovereign Gold Bonds AKA SGBs
What are Sovereign Gold Bonds?
Sovereign gold bonds are RBI mandated certificates issued against grams of gold, allowing individuals to invest in gold without the strain of safekeeping their physical asset. Sovereign gold bonds act as a secure investment tool among individuals, as gold prices are less susceptible to market fluctuations.
Taxation: Interest on the these purchased bonds will be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961)
The Best Part?
Sovereign Gold Bonds are considered one of the best options as investors can not only gain from the appreciation in prices of the precious metal but also earn an interest at the rate of 2.5% on the initial investment amount during the entire tenure.
How should i start Investing in Sovereign Gold Bonds?
You can buy this only from listed scheduled commercial banks. Few examples are: State Bank of India and Central bank of India in the public sector bank category among public sector banks. Few private banks like ICICI Bank, HDFC Bank and Axis Bank and international banks like BNP Paribas and Barclays Bank also offer SGBs. Around 12 public sector banks, 22 private banks and 44 international banks can offer SGBs according to an RBI notification dated April 13, 2020.
Fore more information / clarification / FAQ on this scheme kindly refer official RBI Sovereign Bond scheme details.
- Public Provident Fund AKA PPF
This is one of my favourite, and i've started investing in this from past 1 year. If you want to be an aggressive player in investment, this is the best option!!
What is Public Provident Fund?
A public provident fund (PPF) account is an investment option that provides income tax deduction under section 80C for the amount invested (subject to a limit of Rs 1.5 lakh a year).
You may choose any amount to invest for PPF but make sure that your investment amount is between Rs.500 to Rs.1.5 lakh per year. The best investment option on PPF is to do lumpsum on yearly basis before April-5th of every financial year.
If you have quite a good earning to make your saving, my suggestion would be to proceed with 1.5 lakh per year because it would yield fruitful returns after 15 Years.
Taxation: Under Section 80C of the Income Tax Act, 1961, any investment made towards the PPF account is tax-free. The PPF amount that is received on maturity is tax-free. The investments you make towards PPF every years also let's you avail tax relaxation under Section 80C and can be claimed while filing your ITR.
The Best Part?
- Risk free Interest
- Maturity amount received after 15 years is tax free
- You can claim for tax relaxation under section 80C while filing an ITR for respective every financial year (from the date of investment)
How should i start investing in Public Provident Funds?
A PPF account can be opened in only designated bank branches of SBI and its subsidiaries, ICICI Bank, Axis Bank. Other banks where you can open a PPF account include: HDFC Bank, Central Bank of India, Bank of India (BOI), IDBI, Central Bank of India, Punjab National Bank, Indian Overseas Bank, and few others.
Following are the documents required to open a PPF account
- PPF Account opening form, available at the bank branch or the Indian Post portal
- ID proof that includes any of the following:
- PAN card
- Driving License
- Voter ID Card
- Aadhaar Proof For online applications
- Address proof, from any of the following:
- Telephone Bill
- Electricity Bill
- Ration Card
- Aadhaar Card
- Two current passport size photographs
- Pay-in-slip at the bank branch to transfer the amount to your PPF account, or a signed cheque in favour of your PPF account
- For a minor, a birth certificate may also be required as an age proof
Please Note: There are separate procedures for all the banks but the basic documentation and submission of application remains the same. All documents have to be self-attested, and originals have to be taken while opening the account. Source
How is my PPF return rate calculated per year?
The interest rate applicable on PPF investments is reviewed and announced by the government every quarter. For the quarter ending March 31, 2020, the interest rate offered is 7.9 per cent per annum (compounded yearly). According to PPF rules, the interest is calculated on a monthly basis but it is credited into the account at the end of financial year on March 31. Interest becomes payable for that month if the deposit is made before the fifth of that month.
You may refer this article to calculate your PPF amount.
Looking at the PMC and Yes bank fall. I always think that is my money safe in banks? You may refer this article to learn where to invest apart from banks.
Money will not grow as per your expectations if kept in savings account / FD / lockers, you need to be smart and insightful in terms of investment, that's how most of folks around you might be. You may refer our article about investment on groww app. This might help you in investments in stocks / shares, etc.
Even if i don't gain profit that's fine for me. But, this will ensure that my money is safe and i can use it whenever i want it and that's why i thought i should share with you. This will definitely help you to make investments. Specially when you get to know about the returns from PPF, you'll surely thank StackMantle for publishing this article.