INSUBCONTINENT EXCLUSIVE:
Recurring deposits (RDs) require regular monthly contributions from customers.
When planning your investments you should consider investing in schemes that may not be offering you
income tax benefits but provide decent interest rates
Recurring deposits, post office monthly investment scheme, kisan vikas patra (KVP) and systematic investment plans in equity mutual funds
are some of such investment options
Financial planners suggest that cutting down on the tax outgo should be just one of the goals of investment - the target should be to
increase your savings and add on to your wealth.Given below is a comparison among recurring deposits, post office monthly investment
schemes, kisan vikas patra (KVP), and systematic investment plans:Recurring deposits (RDs):Recurring deposits require regular monthly
contributions from customers
RDs help you build your wealth via your savings
One can choose between six months to 10 years
Interest earned is added to the income and taxed at applicable tax slabs.Post office monthly investment scheme account: This scheme provides
a similar option like RD, where one can invest small amounts every month for a slightly longer tenor of five years
There is 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 payable monthly
The product, however, does not provide any tax benefits but is apt for customers looking at capital protection and moderate returns, said
EVP, Kotak Mahindra Bank.Kisan Vikas Patra (KVP): KVP certificates require a minimum investment of Rs 1,000 and in multiples of Rs 1,000
There is no maximum limit on the amount that can be invested in these certificates
in 118months (9 years and 10months).Systematic Investment Plans: "While the word equity rings a bell, investors need to understand that a
disciplined SIP of a small amount in equity mutual funds significantly reduces the risk and can contribute to tax efficient superior wealth
For tenors greater than 10 years (children's higher education / retirement planning), returns in SIPs of good equity mutual funds have
historically proven to be unparalleled," said Mr Kapoor
(: Mutual Fund Investment: Don't Confuse ELSS With SIP, Here's Why)The key reason to invest in mutual funds is liquidity, says Lakshmi Iyer,
CIO (Debt)- Head- Products, Kotak Mutual Fund."Diversification is the other benefit which cannot be undermined while making investment
Also, MFs offer the entire suite of asset class offerings ranging from fixed income to equities to hybrids, gold, international funds etc
Hence, it tends to act as a 'one stop shop' for making financial investments," she added.So everytime you want to make investments, your
prime focus should be to maximise your returns.
