Best investment plans in 2023 for safe and good returns in India for long term and retirement

Most of the young people, when they start earning after completing education, may be well educated but may not have sound financial education. Due to distractions of desirable goods, they often jump into buying goods which don’t have any investment value. Such people easily get drawn into debt and they have to pay the price later. Instead of spending money mindlessly, they should draw a sound investment plan which will help them in earning safe and good returns in the long run. That way they may generate long term wealth and become financially secured to enjoy the life later. Such sound long term investment plan will definitely bring an independent and happy retirement life. I want to suggest the following best investment plans for long term safe and good returns. Most of these are also the best investment plans for senior citizens and for tax saving. This is only a guide for general public and not investment advice. Please do your home work before investment.

Public Provident Fund (PPF)

PPF is government (NSI) managed national savings scheme. Interest offered on PPF deposits are better than what banks offer and have better tax advantage. PPF account may be opened through most scheduled banks and Post Offices.

Salient Features of PPF:

  • Minimum deposit ₹ 500/- & Maximum deposit ₹ 1,50,000/- in a Financial year.
  • Loan facility is available from 3rd financial year upto 6th financial year.
  • Withdrawal is permissible every year from 7th financial year.
  • Account matures on completion of fifteen complete financial years from the end of the year in which the account was opened.
  • After maturity, account can be extended for any number for a block of 5 years with further deposits.
  • Account can be retained indefinitely without further deposit after maturity with the prevailing rate of interest.
  • The amount in the PPF account is not subject to attachment under any order or decree of a court of law.
  • Deposit qualifies for deduction under Sec.80-C of I.T.Act.
  • Interest earned in the account is free from Income Tax under Section -10 of I.T.Act.

National Savings Certificate (NSC VIII)

National Savings Certificate is government (NSI) managed savings scheme and has tax advantage.

Salient Features of NSC

  • Account matures in 5 years
  • Minimum deposit ₹1000/- and thereafter in multiple of ₹100.
  • No maximum deposit limit.
  • A single holder type account may be opened by an adult for himself or on behalf of a minor.
  • A single holder type account may also be opened by a minor on attaining the age of 10 years.
  • Joint ‘A’ Type account may be opened by up to three adults payable to both the holders jointly or to the survivor.
  • Joint ‘B’ Type account may be opened by up to three adults payable to either of the survivor.
  • Loan facility available by pledging with the banks.
  • Deposit qualifies for deduction under Sec.80-C of I.T.Act.

National Pension Scheme (NPS)

The National Pension System (NPS) is managed by government (PFRDA).

NPS is a market linked, defined contribution product. Under NPS, a unique Permanent Retirement Account Number (PRAN) is generated and maintained by the Central Recordkeeping Agency (CRA) for individual subscriber.

NPS offers two types of accounts, namely Tier-I and Tier-II. Tier-I account is the pension account having restricted withdrawals. Tier-II is a voluntary account which offers liquidity of investments and withdrawals. It is allowed only when there is an active Tier-I account in the name of the subscriber. The contributions accumulate over a period of time till retirement grows with market linked returns.

On exit/retirement/superannuation, a minimum of 40% of the corpus is mandatorily utilized to procure a pension for life by purchasing an annuity from a life insurance company and the balance corpus is paid as lumpsum.

Enrolments and contributions under NPS are made through nodal officers for Govt. employees; employer or PoPs for corporate employees and PoPs or eNPS for other individuals.

Salient Features of NPS

Access and Portability is ensured through online access of the pension account to the NPS subscribers through web portal and mobile app.

• Partial withdrawal- Subscribers can withdraw up to 25% of their own contributions at any time before exit from NPS Tier-I for a maximum of three times during the entire tenure of subscription under NPS for certain purposes specified in the regulations. The partial withdrawals are allowed from NPS Tier-1 after contributing for at least ten years and there should be a gap of minimum five years between successive withdrawals.

• Tax Benefits available under NPS :

a) Employee’s own Contribution towards NPS Tier-I is eligible for tax deduction under section 80 CCD (1) of the Income Tax Act within the overall ceiling of Rs. 1.50 lakh under section 80 C of the Income Tax Act. From FY 2015-16, the subscriber is also allowed tax deduction in addition to the deduction allowed under section 80CCD(1) for contribution to NPS Tier I account subject to a maximum of Rs. 50,000 under section 80CCD 1(B ).

b) Employer’s contribution towards NPS Tier-I is eligible for tax deduction under Section 80CCD (2) of the Income Tax Act (14% of salary for central government employees and 10% for others). This rebate is over and above the limit prescribed under Section 80C. c) Allowed withdrawals are also tax exempt.

Equity Linked Savings Scheme (ELSS)

ELSS is the most popular Mutual Fund (MF) for safe and high returns over long term and have tax advantage under section 80C. ELSS has potential to provide safe and high returns over long term which have 3 years minimum locking period. One can easily subscribe to ELSS of his/her choice online or by visiting respective bank or fund manager office.

Salient features of ELSS

  • Safe and High returns over long period
  • Tax advantage under section 80C
  • Minimum 3 Years locking period
  • Easy availability of large number of ELSS funds offered by reputed banks and financial institutions

Unit Linked Insurance Plan (ULIP)

If somebody wants insurance, investment and tax advantage all three together, ULIP is a good choice for long term investment to reap the benefits from equity and debt market. ULIPs are offered by all major insurance companies and normally have a minimum locking period of 5 years. One can choose from a large number of ULIP plans offered by major insurers and subscribe online or by visiting to insurer’s office.

Salient features of ULIP

  • Investment with life cover
  • Tax advantage under section 80C
  • Easy availability of large number of ULIPs offered by reputed insurance companies

Similar Posts