dattatraya (officer accounts) (30 Points)
06 February 2014
Mihir
(Wealth Manager)
(5293 Points)
Replied 07 February 2014
All three are good investments.
PPF earns a good non-taxable return. Deposit is eligible for deduction u/s 80C upto 1 lac. Deposit amount is not fixed ranging from 500 to 1 lac per year.
LIC endowment plan could fetch good returns but the deposit or premium amount is going to be fixed and als eligible for deduction u/s 80C.
If you see your cash inflow to remain steady for 15 years, you may opt for LIC. But if you like flexibility in deposit amount, then PPF is good. However, future is uncertain because if the government decided to make the PPF maturity amount taxable, then your returns will be reduced.
So I say use both for flexibility and good safe returns. Get an LIC endowment plan for 15 years, and also open a PPF account.
Vikash Singh
(Accountant)
(21 Points)
Replied 13 December 2014
hi friends I am 25 years now I want to invest Rs : 40,000 p.a. up to 15 years for my son education purpose my questions is that Bank RD LIC or PPF which options is better for investment & gives maximum returns on maturity please suggests me for better options
Roshan Thomas
(C.E.O )
(356 Points)
Replied 24 December 2014
The Highest return is always given by PPF since the contribution is tax deductible and interest as well as the maturity proceeds is exempt therfore the effective rate of return will be way higher. PPF interest is around 8.75%. The downside is PPF cannot be withdrawn inbetween, but only at the end of 15 years. (You can take loan)
Bank RD interest rate for 15 years maybe around 10% but the interest is taxable, thus effective rate of return comes down to 7-8% (depending on your tax bracket)
LIC Plans offer lower returns because it is not meant to be a investment option alone, it combines investment and insurance thus a part of your investment goes into insurance risk. The yield of insurance is around of 7-8%, also the contribution is tax deductible.
Give first preference to PPF then Bank RD and at last LIC endowment
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