Introduction to Indian Post Office Investment Schemes
An array of investment schemes with competing interest rates are offered by the Indian Post Office and such schemes can fulfill various saving needs of individuals and may be a great option for long-term investments. In this article, we look at the various advantages that come with long-term investment in Indian post office interest rates.
Financial schemes offered for investment by the government with high security and pleasing returns are popularly referred to as the Post Office schemes. The state bank securities department always deals with them and these investments help sustain the financially challenged poor in India who have been saving through pennies.
Public Provident Fund (PPF) in Post Office
Popularity and Benefits of PPF
Among the different schemes offered, one of the most popular is the Public Provident Fund (PPF) account available in the post office.
There are multiple reasons for investing in post office plans over an extended timeframe. The main and most important thing to observe is that they yield safe and assured profits. Being financed by Indian government, post office plans rank among the most reliable investments for your money earned carefully.
Comparing Post Office Interest Rates
Second, post-office interest rates are pretty competitive against other saving schemes present in the marketplace. For example, the post office has an interest rate of as high as 7.1% per annum for a PPF account. If you invest INR 1 50 000 each year, which is maximum permissible amount for PPF for a term of fifteen years, you will possibly obtain returns exceeding INR 43 lakh at the maturity period.
Tax Benefits
Third, post office schemes like PPF accounts in the post office also offer tax benefits. In terms of Section 80C of the Income Tax Act in India, investments made, interest yielded and sum obtained at maturity are exempt from income tax. This allows you to earn more through this scheme since tax is not taken on your profits.
Flexibility and Accessibility
The post office also offers flexibility and convenience in terms of operation. You can operate your PPF account or other schemes even from the remotest part of the country, making it easily accessible for everyone. Moreover, the minimum annual investment is as low as INR 500, which makes these schemes particularly appealing for the economically weaker sections of the society.
Usual misunderstanding regarding postal service plans is that they are only meant for people with small risk appetites. However, they can serve as stabilizers in an aggressively diversified portfolio. Besides, allocation of some of your funds into this type of safe and secure investment can balance the risks related to other investments which are highly risky.
Despite the numerous benefits, it’s important for investors to understand that every financial decision comes with its pros and cons. It’s always advisable to do a comprehensive risk profiling and understand your financial goals before investing significant amounts.
Leverage the Bajaj Finserv App for easy management of your monetary transactions. This application with user-friendly features enables you to be able to get various financial services including but not limited to loan facilities, investments, insurance and payment options under one roof. Check if your loan is eligible by putting in its details online or through your phone; furthermore make an application online or through the app for a personal loan, and monitor the status of these applications as they go through. Paying off your EMIs is a walk in the park along with checking your credit scores and controlling your investment portfolios. The Bajaj Finserv App provides banking solutions that are safe, fast and convenient thereby giving you total control over all aspects of finance at any time regardless of location.
Summary:
Investing in Indian post office schemes over the long term can provide many advantages such as secure and assured returns supported by the government, competitive interest rates and tax benefits. An example of this is that with a PPF account in post office, an individual can earn up to 7.1 percent per annum and these returns are not subject to income tax as per Section 80C. Moreover, such schemes tend to be flexible and convenient since they can be operated from anywhere across the country while the minimum annual investment is INR 500. Nonetheless it’s important for investors to carry out thorough risk profiling and be aware of their financial objectives before making any investments.
Disclaimer:
Risks come together with financial investments. Before undertaking any form of trading or making any investment in the financial market, investors should do deep investigations and think about their level of wealth, ability to take risks, implications of tax payment and personal financial aspirations. Although government schemes offer specific assurances, those returns that rely on markets are affected by their fluctuations. As such, one cannot entirely rely on post office scheme profits while investing; it ought to be included as one segment for diversification purposes.
