Others

Other Investments options -

Gold Investments

Physical Gold

Investment in gold is like purchasing a commodity and selling it later on a higher price. You purchase gold or ornaments made from gold at its market price and when the value of its market price increases, you sell it. Possessing gold in the form of jewelry has its own concerns like safety and high cost. Then there's the 'making charges', which typically range between 6-14 per cent of the cost of gold. One can buy gold coins too.

Gold ETFs

An alternate way of owning gold in more cost-effective manner, can be done through Gold ETFs that is Gold exchange traded funds. Such investment involves buying and selling on a stock exchange with gold as the underlying asset. Gold ETFs are open-ended mutual fund schemes that will invest the money collected from investors in standard gold of 99.5 per cent purity. These funds are of open-ended nature that trade on a stock exchange just like the shares of an individual company. Gold ETFs are units representing physical gold, which may be in paper or dematerialized form. These units are traded on the exchange like a single stock of any company.

E-gold

E-gold, an electronic way to buy gold, is the other way to invest in Gold. The advantage of buying e-gold is cost effectiveness. In e-gold, there are no recurring expenses such as management fee. This reduces the cost and increases returns year-on-year. Thus, e-gold is more effective in the long term. In India, e-gold is offered by the National Spot Exchange Limited (NSEL), which gives investors the option to invest in commodities such as gold, silver and platinum online.

Investing in Sovereign Gold Bonds (SGB) is another option to own paper-gold. These Bonds can be brought online through scheduled commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognized stock exchanges viz., National Stock Exchange of India Ltd and Bombay Stock Exchange.

Recurring deposits (RD)

The deposit scheme in which the depositor is allowed to deposit a specified sum of money at regular intervals, in the bank or financial institution on a particular date for a long time is known as Recurring Deposit. It is also a kind of term deposit on which the bank gives interest on the savings at a particular rate on the basis of compound interest. The rate of interest varies from, bank to bank. The whole amount is repaid along with accumulated interest on it, at the expiry of the term for which it is deposited. Recurring Deposit or RD is a kind of bank account in which the customer has to deposit a fixed sum of money in short intervals for a long time. It aims at inculcating the habit of saving money. Returns are comparatively less than fixed deposits, but it develops the habit of saving in depositor at the same time there is no need of onetime lump sum amount investment like that in FD. Small amounts can be deposited regularly.

Bank fixed deposit (FD)

Fixed Deposit, shortly known as FD, is a kind of term deposit in which a particular sum of money is deposited in the bank or financial institution at the time of opening the account, for a long time. The scheme fetches interest, whose rate depends on the period of investment and norms of the bank in which the account is opened. At the expiry of the stipulated term, the account holder gets the entire amount, i.e. principal and interest on the deposit made by him for so long. Investment is Lump Sum in Fixed deposit.

A bank fixed deposit (FD) is a safe choice for investing in India. Under the deposit insurance and credit guarantee corporation (DICGC) current rules (as mentioned in website of DICGC), each depositor in a bank is insured up to a maximum of Rs. 5,00,000 (Rupees Five Lakhs) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank's licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force. This includes all deposits held by a person in current account, savings account, fixed deposits etc. As per the need, one may opt for monthly, quarterly, half-yearly, yearly or cumulative interest option in them. The interest rate earned is added to one's income and is taxed as per one's income slab each year. Returns are comparatively more than recurring deposits.

National Savings Certificate (NSC)

National Savings Certificates, popularly known as NSC, is an Indian Government Savings Bond, primarily used for small savings and income tax saving investments in India. It is part of the postal savings system of Indian Postal Service. These can be purchased from any Post Office in India (either in his/her own name or on behalf of a minor), a minor, a trust, and two adults jointly. These are issued for five and ten year maturity and can be pledged to banks as collateral for availing loans. The holder gets the tax benefit under Section 80C. The main objective of investing in the NSC is to get tax deduction on deposits and guaranteed returns on investment. The rate of interest from 1st April 2020 is around 6.8% per annum.

 

Post office Monthly Income Scheme (POMIS)

Post office Monthly Income Scheme account. POMIS is a five-year investment with a maximum cap of Rs 9 lakh under joint ownership and Rs 4.5 lakh under single ownership. The interest rate is set each quarter and is currently at 6.6 per cent per annum, payable monthly. Post Office Schemes are offering made by the Government of India. These are various types of schemes/bonds that help you save money. Capital protection is its primary objective.

 

National Pension Scheme (NPS)

NPS, is a scheme issued by the Govt. of India aimed at a relaxed retirement life for you. NPS aims to secure a regular income after retirement and to inculcate the habit of saving for retirement among the citizens. It’s launched by the PFRDA better known as Pension Fund Regulatory and Development Authority. It is a market linked scheme. The National Pension System (NPS) is a long term retirement - focused investment product managed by PFRDA. The minimum annual financial year contribution for an NPS account to remain active has been reduced from Rs 6,000 to Rs 1,000. It is a mix of equity, fixed deposits, corporate bonds, liquid funds and government funds, among others. Based on risk appetite, one can decide how much of your money can be invested in equities through NPS. On retirement, subscribers can withdraw a part of the corpus in a lump-sum and use the remaining corpus to buy an annuity to secure a regular income after retirement.

The Public Provident Fund (PPF)

Public Provident Fund is the common man’s answer to tax saving in India.

The Public Provident Fund (PPF) is one product a lot of people turn to. Since the PPF has a long tenure of 15 years, the impact of compounding of tax-free interest is huge, especially in the later years. Further, since the interest earned and the principal invested is backed by sovereign guarantee, it makes it a safe investment. The rate of interest for the financial year 2020-21 from 1st April 2020 is fixed at 7.1%.  Lock in period for PPF investment is 15 years. Tax benefit under section 80C can be availed. As compared to PPF, the ELSS Mutual Funds may prove better option. ELSS Mutual Funds also, like PPF, save Tax under Section 80C of Income Tax Act of India. However, ELSS may provide better returns than PPF and have a shorter lock-in period of 3 years.

Senior Citizens' Saving Scheme (SCSS)

Probably the first choice of most retirees, the Senior Citizens' Saving Scheme (SCSS) is a must-have in their investment portfolios. As the name suggests, only senior citizens or early retirees can invest in this scheme. SCSS can be availed from a post office or a bank by anyone above 60. SCSS has a five-year tenure, which can be further extended by three years once the scheme matures. Currently, the interest rate that can be earned on SCSS is 7.4 per cent per annum, payable quarterly and is fully taxable. Investments in SCSS qualify for income tax deduction benefit under section 80 C. The interest rate revises quarterly. The maximum investment limit is Rs 15 lakh, and one may open more than one account.