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The National Pension Scheme is a government-run pension scheme that offers excellent retirement saving options to all the citizens of India. Anyone employed in the private or public sector can get enrolled in the NPS and build up a retirement corpus for himself. The National Pension Scheme offers various other benefits too, and this makes the scheme an ideal choice for those who like planning ahead for their golden years.

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Which Bank Provides the Highest Interest Rate on Your Fixed Deposit?

There isn’t a single aspect of our lives that has not been hit hard by the ongoing pandemic. It has cannoned into every country’s economy. No wonder it influenced RBI’s decision to fix the repo rate at a record low of 4%. This, in turn, has been instrumental in lowering the FD interest rates of banks.

Fixed Deposit allows you to lock in the corpus for a fixed tenure in a bank or a non-banking financial company (NBFC). FD is a secured market-investment tool, wherein you enjoy guaranteed return at low risk. Once your money is stationed at a fixed interest rate, your fixed deposit rate stays unchanged throughout the tenure of your investment, irrespective of any future changes. Before you invest in FD, here’s what you should know:

The lock-in period in an FD typically ranges from 7 days to 10 years. Please note that the tenure is directly proportional to the rate of interest.

The more the amount deposited the higher the rate of interest will be, resulting in a higher return.

Senior citizens enjoy higher rates of interest as compared to normal FD interest rates.

More on Fixed Deposit:

You earn more interest on your FD than your savings account.

Any Indian resident, including minors and Hindu Undivided Family, is eligible to open an FD account

 Withdrawal of money before the maturity of the account is not permitted. You can make a partial withdrawal in case of an emergency.

You need to link your savings account with your FD account. This eases the process of transferring money to your FD account from your savings account and vice versa.

Choose two nominees for your FD account

You can also take a loan against your FD

FD Interest Rates of Different Banks:

For general citizens:

Bajaj Finance FD interest rates are the highest at 7.00% for deposits across all the tenures to individuals below 60 years Banks such as Citi Bank provides an interest rate as low as 2.40%-3.50% on your FD. Some banks—for instance, Allahabad Bank, Bank of India, Bandhan Bank, Corporation Bank, Indian Overseas Bank, PNB and SBI offer rates of interest on your FD within the range of  2.90% to 6% approximately. Whereas, financiers such as DCB Bank, Equitas Small Finance Bank,  ICICI Home Finance, Indian Post Office and PNB Housing Finance allow FD interest rate as high as 4.25% to a maximum of 6.80%. Of all the small finance banks, Jana Small Finance Bank offers the best FD rate of 7.25% to general citizens.

For senior citizens:

Yes Bank provides the best interest rate of 7.50% on their FD. Bajaj Finance FD interest rates stand as high as 6.40-7.25%. Some other banks such as Andhra Bank, Canara Bank, Corporation Bank, Dhanlaxmi Bank, Laxmi Vilas Bank allow FD interest rates between 3.50% and 6.50%. Equitas Small Finance Bank offers up to 7.30%. Amongst the small finance banks, Jana Small Finance Bank offers the best FD rate of 7.75% to senior citizens.

Conclusion:

If you want to invest in an FD, make sure you compare the different interest rates offered by various financial institutes before you park your hard-earned money. Make sure your financer offers a competitive rate of interest, such as Bajaj Finance FD interest rates. Take into consideration a few other factors—such as flexibility of tenure, ease in the process of application and ratings and approvals—and you are good to go.

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Why Employer Contribution is Tax-Free under the National Pension Scheme?

The National Pension Scheme is considered as one of the most preferred investment tools for retirement planning. NPS is a tax-efficient financial product that not only builds a good corpus for your retirement but also offers regular pension facility on retirement. Investing in the National Pension Scheme helps you reduce your tax outgo. Before we focus on the tax implications on National Pension Scheme investment, let’s know in brief about the National Pension Scheme

National Pension Scheme – An Overview

National Pension Scheme is a long-term and voluntary investment scheme launched by the Government of India for retirement. The scheme is available for all citizens of India between the age bracket of 18 years and 65 years. National Pension Scheme is a market-linked financial product that does not allow you to withdraw till the time of maturity i.e. 60 years of age. You can choose the fund and fund manager for your NPS. Your investment into the national pension scheme is managed by India’s best professional fund managers. 

National Pension Scheme – Performance

Best NPS plan helps you grow your investment over the years at a good rate. The National Pension Scheme is suitable for conservative to aggressive investors. Based on your risk appetite you can make fund selection. Etmoney.com is the best personal finance platform that helps you compare the National Pension Scheme online based on their performance and fund size, etc. 

(Please note: above returns are for an aggressive portfolio of 36 years old investor)

National Pension Scheme – Tax implication

NPS subscribers can claim tax deduction under Section 80 CCD (1) of the Income Tax Act, 1961 for the investment of up to a maximum of INR 1.5 lakhs. For NPS subscribers with Tier, I accounts, an additional deduction for investment up to INR 50,000 is available under subsection 80CCD (1B). That makes the total tax deduction available for National Pension Scheme investment is INR 2 lakhs. Now, let’s focus on tax implications on employer contributions under the National Pension Scheme.

Employers can contribute to your National Pension Scheme investment. Your employer’s contribution to the National Pension Scheme is a part of your taxable salary, which will reflect in form-16. Employer contribution under National Pension Scheme is allowed for the deduction of up to 10% of the salary and 14% of the salary for central government employees under Section 80 CCD (2) of the Income Tax Act, 1961. However, the deduction allowed is subjected to the aggregate contributions towards National Pension Scheme, Employee Provident Fund and Superannuation of up to INR 7.5 lakhs in a year. The amount in excess of this limit is taxable.

You can invest in the National Pension Scheme online through etmoney.com, one of the best personal finance platforms. As etmoney.com lists out the best NPS plans of various fund managers, it becomes easy to compare each of this National Pension Scheme online on the basis of returns, fund size and the fund manager. You can also choose the portfolio – aggressive, moderate or conservative depending on your risk appetite and investment preference. Visit etmoney.com and invest in National Pension Scheme Online to secure your post-retirement life.

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One of the most remarkable ways to build wealth is to invest in businesses, real estate, stocks, mutual funds, and bonds, which can continue to generate income for you daily, weekly, and monthly. However, one must note that generating earnings is only a piece of the puzzle. What is more important is to know how much we are paying to acquire this income-generating asset, which means we must be aware of the price and the earnings, both.

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Senior Citizens and longer tenures get higher interest rates Senior citizens can earn more from their life's savings and move one step closer to no-compromise retired life 

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Fixed deposit schemes are very popular in India. Almost every investor finds fixed deposits suitable for their portfolio for the guarantee that such schemes provide. In fact, when considering fixed-income schemes, investors tend to pick fixed deposits online over other available schemes. Have you ever wondered why?

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The Government of India introduced the National Pension System (NPS) to promote retirement saving among individuals. The scheme was earlier launched only for Government employees but then, in the year 2009, it was made public to all. Moreover, to encourage individuals to invest in NPS online, the Government also introduced tax benefits on NPS investments.

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No matter how interest rates move or economy performs, you will get the returns fixed at the time of investing.

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Invest in NPS in monthly instalments through the year. Start a SIP today and ensure maximum tax savings. Automate payments with EasyPay.

https://www.etmoney.com/nps

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Balanced hybrid funds invest an equal amount in stocks and FD-like instruments. These funds provide you a truly balanced portfolio that combines growth and stability.

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In NPS Your investment is locked-in until you turn 60 years. Plus, a minimum yearly investment of Rs.1,000 is compulsory

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In Fixed deposit  Get money as per your needs with flexible interest payout

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With dual advantage of Tax-saving & potential for better returns than traditional Tax-saving Investment Products, this category of Mutual Fund Schemes is must have for every investor. These funds also have the lowest lock-in period of just 3 years amongst all the options available in Section 80C.

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Retirement planning is essential if you want to create a substantial corpus to last you for your life. When doing so, choosing a suitable investment avenue is also crucial.

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On Friday, November 9, 2020, SEBI, through a circular, announced the creation of a new mutual fund category. The new category has been named Flexi-Cap. This was a widely anticipated move after the uproar over the proposed changes to the multi-cap fund category.

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Assured returns, and safety of invested amount make sure you can meet these goals with ease

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Now, invest in NPS in monthly instalments through the year. Start a SIP today and ensure maximum tax savings. Automate payments with EasyPay.