5 Ways to Invest Your Savings

People usually opt for investment when they are worried about their financial security. On this account, each and every individual searches for best ways to attain financial security of their savings. The aim of any investment plan is to maintain your money balance and grow it over time. Investing is an ideal option to generate wealth and accomplish the goal of saving taxes. Out of them, 5 ways of investing anyone’s savings are discussed below:

1.     Public Provident Fund (PPF)

Public Provident Fund is considered to be one of the preferred investment options in the post-retirement phase. Under the PPF plan, account opened in a bank or post office will be locked-in for 15 years, and the account holder can earn compound interest on this account. One can also extend the time frame for next 5 years. The only drawback of the PF account is that the account holder isn’t allowed to withdraw his/her investment until the end of 6th year. The interest rate of PPF is set by the government every quarter based on the profit of government securities. Under this public provident fund, one has to deposit annual minimum amount of Rs. 500 and the maximum amount of Rs. 1.5 lakhs in a financial year. It offers a tax-free loan facility.

2.     Recurring Deposit

A recurring deposit is the way to safely deposit money at a bank or post office. The term of recurring deposits varies from bank to bank. Where a bank offers 5 years deposit plans usually, it may offer 12 months of plan as well. There is no such limit in the minimum or maximum amount to deposit. Various interest options of monthly, quarterly, half-yearly, yearly or cumulative are available with recurring deposits.

3.     Bank Fixed Deposit

Fixed deposits are very popular among the fixed-income-providing investment plans is India. As they offered fixed return over the investment tenure, bank fixed deposit became very popular among the investors. As per the bank guidelines, there are several flexible ranges of monthly, quarterly, half-yearly, yearly or cumulative interest options to meet the needs of the investors. There are cumulative and non-cumulative interest options offered to fixed deposit, depending on the bank’s or financial institutes’ terms. As per the non-cumulative option, the interest is paid according underwriting, whereas in the cumulative option, the interest is reinvested within the FD and then payable at maturity of the investment plan.

The interest rates in fixed deposits are attractive as they range from about 6.50% for regular account holder to over 7% for senior citizens. There are many banks and financial corporations are in the scene to facilitate the investors. NBFCs like Bajaj Finance usually offer a higher rate of interest than banks and also offer several additional benefits other than the typical features of Fixed Deposits. Some of the banks and financial unit’s Fixed Deposit Interest Rate are as follows:

Bank Tenure Interest Rate
SBI 180 days to 210 days 6.35%
HDFC 46 days to 6 months 6.25%
Axis Bank 6 months to 8 months 29 days 6.75%
Bajaj Finserv 12 months to 60 months 8.65%
Kotak Mahindra Bank 180 days to 269 days 7.00%


4.     National Pension System (NPS)

Aiming at providing old-age security to its citizens, National Pension System is a pension cum investment plan inaugurated by the government of India. As per the choice of investors, the fund invests in equity, bonds, government securities, and investment alternatives. Under this scheme, the locked-in period for any investors depends on their age. Only when the investor turns 60, the plan matures. Under this scheme, the accumulated interest I tax-free. Main objectives of NPS are follows:

  • Provide old age income
  • Reasonable market-based return policy over long term
  • Expanding old age security coverage to all citizens of India

5.     RBI Taxable Bonds

RBI taxable bonds are issued in demat mode only and are credited to the bond ledger account (BLA) of the investor. It has tenure of 7 years, which offers an interest rate of 7.75% per annum. The interest can be availed as a regular income in the non-cumulative option, whereas the cumulative option includes reinvested interest. The bonds are issued at a price of Rs. 100, and the investors are provided with a certificate of holdings as a proof of the investment.

When it comes to making investment decisions, one must choose options that offer the most lucrative returns and flexible benefits that can be availed in addition to the usual features of the product.