Expecting Salary Bonus This Festive Season? Here is How You Can Get Good Returns on Investing It
We all await bonuses during the festive season but never really think of investing them in a scheme that provides good returns. Usually, your first thought is mostly about how to spend and what all to buy for yourselves or your loved ones. However, take a minute and think long-term. For how long will your bonus last? What if you invest your bonus and let it grow?
Investing money allows you to allocate it in wealth creation instruments and provides an opportunity to increase your financial worth. If you scrape together even a small amount of money for investment purposes, you can add to a healthier financial future.
There is a wide variety of investment options available for all Indian citizens. It may become hard for you to choose the right ones. No worries, with the help of a proper financial advisor and investing options given below, you can add more fortune to your incentives this festive season:
Public Provident Fund or PPF
Public Provident Fund or PPF is a savings instrument created by the Government of India. It provides fixed returns along with tax benefits under section 80C. You can open your PPF account through any nearby post office and in major banks. It has a lock-in period of fifteen years.
PPF’s interest rate is reviewed by the government every quarter. Currently, it is 7.9% for 2019-20. These investments come under (EEE) or Exempt-Exempt-Exempt category, which means that apart from the principal investment, maturity and interest value is also tax-free.
You can start your PPF account with a minimum contribution of Rs 500 and a maximum of INR 1.5 lakh in a year.
Fixed Deposits or FDs
FDs are one of the most common ways to invest money in India that is available in major banks and post offices of our country. It is a secure form of investment that assures good returns. You will get decent interest on the amount you invest in them, along with tax benefits.
The current rate of interest offered by bank FDs ranges from 6% to 7.25%. Tax-saving FDs come with a lock-in period of 5 years. The interest in these FDs is fully taxable and subject to TDS. However, post-office FDs are not taxable.
SIP Or Systematic Investment Plan
A SIP allows you to invest a fixed sum in a mutual fund scheme that suits you the most. In SIP, a fixed amount is deducted regularly from your savings account as an investment in the mutual fund of your choice.
The main motto of the SIP investment focuses on the philosophy of “Save First, Spend Next.” You can start investing in SIP with the amount as low as Rs 500/-. It allows you to invest in fixed intervals- weekly, monthly or quarterly, instead of making a one-time investment.
National Savings Certificate Or NSC
National Savings Certificate or NSC is a savings instrument created by the Government of India. NSC’s interest rate is reviewed every quarter, but currently, it is 8%. They come with a tenure of 5 years. The interest on NSC is also eligible for tax deduction under Section 80C.
For Instance, If Mr. X has invested Rs 1,00,000/- in NSC, and it pays interest of 8%, then the interest amount, i.e., Rs 1,08,000/- will also be exempted from tax. Hence, your total tax deduction will go up to Rs 1,08,000.
Unlike FDs, you can take the loan against NSC.
Your salary bonus must have made you happy this festive season. However, you will feel happier to see the bonus grow when you invest it in the ways mentioned above. Also, it is advisable to take help from financial advisors, such as FinEdge, to enhance your returns and get the right advice for wealth creation.
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