7 Best Debt Saving Instruments in India

By | February 14, 2019

There are lot of investors who have low risk profile and want their investments in the instruments with minimum downside risk. For such type of investor, we cover some of the best debt saving instruments in India for their investment.

We have various type of Debt saving instruments in India each having different features/benefits. Let’s understand the features/benefits of the most prominent one’s.

Debt Saving Instruments in India

Best Debt Saving Instruments in India

Fixed Deposits

Fixed deposit are financial instruments provided by all the leading banks of India & some NBFC which provided higher interest rate than saving accounts for a specified tenure. A person can invest any desired amount.

Annual Return

Upto 8.25%, Taxable

FD latest return rates could be find here

Key Features

• Investment Cap- none
• Lock in tenure- upto FD tenure
• Pre withdrawal- With Penalty Charges

Recurring Deposit

Recurring Deposit is a kind of term deposit offered by banks in which a person can invest a fixed amount every month for a specified tenure.

Annual Return

Upto 8.25%, Taxable

RD latest return rates could be find here

Key Features

• Investment Cap- No Limit
• Lock in tenure- upto RD tenure
• Pre withdrawal- Allowed with Penalty charges

Public Provident Fund (PPF)

Public provident fund is an instrument which can be used for long term investment and provide tax benefit under sec 80c & tax free returns

Annual Return

8%, Non Taxable

PPF latest return rates could be find here

Key Features

  • Investment Cap- Rs 1.5 Lakh annually
  • Lock in tenure- 15 years
  • Pre Withdrawal- not allowed before 5 years

Employee Provident Fund (EPF)

Employee Provident Fund is an saving instrument which provide security to the the employees post retirement.The moment you start working you & your employer start contributing 12% of basic salary to  EPF account.

Annual Return

8.55%, Non Taxable

EPF latest return rates could be find here

Key Features

  • Investment Cap-12% salary contributed by employer and employee each
  • Lock in tenure- Till retirement
  • Pre Withdrawal- allowed when one is unemployed or as an advance purpose for certain reason.

Voluntary Provident Fund (VPF)

Under VPF scheme an employee can contribute any percentage of his salary to EPF account.

Annual Return

8.55%, Non Taxable

Key Features

  • Investment Cap-Upto 100% of your basic salary
  • Lock in tenure- Till retirement
  • Pre Withdrawal- Not allowed before 5 years

Senior Citizen Saving Schemes

This is most ideal investment scheme for retired employees. The schemes offers regular flow of income with high security & tax benefits.

Annual Returns

8.7%, Non Taxable

Senior citizen saving schemes latest return rates could be find here

Key Features

  • Investment Cap- Rs 15 Lakh in total
  • Lock in tenure – 5 years
  • Pre Withdrawal- Allowed

Sukanya Samridhi Yojana

Sukanya Samridhi Yojana is the saving scheme which helps parent & guardian of girl child to build financial corpus for their education & marriage needs.

Annual Returns

8.5%, Non Taxable

Sukanya Samridhi yojana saving schemes latest return could be find here

Key Features

  • Investment Cap- Rs 1.5 Lakh annually
  • Lock in tenure – 21 yrs of age
  • Pre Withdrawal- Allowed after attaining 18 years of age

The above listed options are some of best debt saving instruments in India available as of today. If utilized effectively it can help you build your financial corpus or fulfill your regular financial needs.

Also read: How to build financial Corpus for your needs ?

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