Invest your money in higher yielding instruments

December 10, 2015 Finance Talk Valli Sarvani No comments

Interest rates have fallen, especially bank deposits are not yielding good returns in recent days. There are certain investments which are alternative to bank deposits. Below is a list of investments that yield greater returns than bank deposits.

The Public Provident Fund or PPF account offers interest at 8.70 per cent. Anyone can invest in this scheme. The investment in PPF has two benefits. The first one is that the amount invested in this scheme is exempt of tax under Section 80C of the Income Tax Act. And the second benefit is that no tax is payable on interest earned in this scheme.

Kisan Vikas Patra or KVP is a saving certificate. It provides returns at the rate of 8.70 per cent. The better returns attract many investors to choose this scheme. Yet, the major drawback in this scheme is neither the amount invested in KVP nor the interest on these certificates has tax benefit. Furthermore, the maturity period is 30 months and premature encashment is not allowed. Hence, despite its higher returns, these certificates are not attracting many investors.
Post Office Time Deposits are better than many bank deposits with 8.5 per cent interest rate.

National Saving Certificates or NSCs for 5 years are offering 8.5 per cent interest. These certificates provide tax benefit under Section 80C of the Income Tax Act.

Post Office Monthly Scheme is another option which you can consider to invest your money. With 8.40 per cent each year, this scheme yields returns better than many bank deposits.

If you are a senior citizen, then you can invest in Senior Citizens Savings Scheme. It gives you the highest interest rate of 9.30 per cent. You can open this account even if you are 55 years old, and retired under VRS. Certain rules are there to open an account under this scheme.

Sukanya Samriddhi Yojana is designed for girl child. The investment in this account yields returns at the rate of 9.20 per cent. Any parents of the girl child below 10 years of age can open this scheme on behalf of their daughter. It has tax benefit under Section 80C of the Income Tax Act as well.

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