To be on safer side, as a retail investor, you can invest either in a bank deposit schemes or post office deposit schemes. In our last article we have discussed about the available post office small saving options for a retail investor.
In India, we have different type of banks available to invest. As a retail investor you can choose any of these private or public sector bank to invest your hard earned money in a secured way.
Today, in this article, we will show you 5 best bank deposit schemes or investment options for retail investors.
Public Provident Fund Scheme – 15 year deposit schemes
Public provident fund scheme or PPF is an attractive deposit scheme in India as this investment not only gives higher interest rate but also tax free. In PPF, you are required to invest for 15 years to get a lump sum amount at the end of maturity. After maturity you will also have option to extent the investment tenure to another 5 years term.
Attractive features of PPF;
- Withdrawal and loan facility can be availed by investor.
- Higher tax free per year interest rate of 8.6%.
- PPF account can be opened in the name of minor as a guardian.
- Investment into PPF is eligible for deduction under section 80C for a maximum amount of up to Rs. 100000.
Recurring deposit – Periodic bank deposit scheme
Recurring deposit is the best monthly deposit scheme of a bank where you invest periodically for a certain number of periods to get paid at the end of the term. You can ask your bank to deduct the stipulated amount from your savings or current account every month.
Attractive features of Recurring Deposit schemes;
- You can start with a minimum amount of Rs. 500 per month for minimum period of 6 months up to a maximum tenure of 10 years.
- You can also apply for a joint recurring deposit account.
- Interest rates are the same as bank’s fixed deposit scheme
- TDS not deducted from interest on recurring deposit
- Premature withdrawal allowed but interest on recurring deposit scheme will be lower than the base rate and penal interest can be levied.
- Loan or overdraft up to 90% of the balance in recurring deposit account is allowed.
Term Deposit – Bank’s Fixed Deposit Scheme
Term deposit which is also known as fixed bank deposit scheme is one of the favourite investment options in our country. You invest a lump sum amount for a fixed tenure at predefined fixed interest rates in a bank where you have opened your fixed deposit account.
Attractive features of bank fixed deposit scheme;
- Get fixed interest rate for a predefined period on your investment.
- Secured and risk free.
- Eligible for tax deduction under section 80C up to a maximum amount of Rs. 100000 if you have invested for 5 years. TDS is deductible on interest on fixed deposits irrespective of the tenure of investment.
Saving account – Regular small bank deposit scheme
Bank saving account is a must for every Indian to keep their emergency fund in a safe place. In return of investing in saving account, you will get good return with all those facility that one normally require to have.
With the increase in completion, now you can open saving account with attractive interest rate with YES bank, Kotak Mahindra Bank and Indusland bank.
Attractive features of bank saving account;
- Money can be withdrawn at any moment as required by investor
- Account can be used as a sweep in account for term deposits to get interest at a higher rate which is close to fixed deposit interest rate.
- Better option than keeping cash in hand
NRI deposits – Deposit scheme for Non Resident Indians
If you are a non resident Indian then banks are offering various investment options or deposit schemes to keep your money safe back at home. You can open various NRI saving account and/or fixed deposit schemes to get good return on your investments.