Investments in small savings schemes help investors create an emergency purposes and achieve financial goals. They also offer tax benefits up to ₹1.5 lakh

Published26 Dec 2024, 05:40 PM IST

Stable investors who stop from investing in equity tend to invest in financial instruments that give assured returns. These instruments include post office schemes or small savings schemes.

There are a number of Small saving scheme that offer tax benefits along with assured returns to investors.

Investments in these schemes not only help create a corpus for emergency purposes and help achieve financial goals but also offer tax benefits up to ₹1.5 lakh . 

Top 9 small savings schemes (post office schemes):

I. Post office savings account: This offers 4 per cent interest and the minimum contribution is ₹500.

II. National Savings Recurring Deposit Account: From January 1, the interest rate offered on NSC is 6.7 per cent a year. The minimum investment one can make in this deposit account is ₹100 a month, and there is no maximum cap.

III. National Savings Time Deposit: One can open an account for ₹1,000 and in multiples of ₹100. There is no maximum limit. 

For one year, the interest rate is 6.9 per cent and for two years, it is 7 per cent. For three years, the rate of interest is 7.1 per cent and for five years, one is entitled to earn 7.5 per cent interest.

IV. National Savings monthly income account: It offers 7.4 per cent interest per annum. Deposits can be made in multiples of ₹1,000, and the maximum investment limit is ₹9 lakh in a single account and ₹15 lakh in a joint account.

V. Senior Citizens Savings Scheme Account (SCSS)​: It offers 8.2 per cent per annum payable from the date of deposit to March  31/ Sept 30/ Dec 31 in the first instance and thereafter, interest will be payable on April 1, July 1, October 1 and January 1. 

There will be one deposit in the account in multiples of ₹1,000 while the maximum limit is ₹30 lakh.

VI. Public Provident Funds: – PPF offers 7.1 per cent per annum to investors. The minimum investment is ₹500 while the maximum is ₹1.5 lakh in a financial year.

VII. Sukanya Sam Riddhi Account: It offers 8.2 per cent per annum. The minimum investment one can make is ₹250 while the maximum investment is ₹1.5 lakh in a financial year.

VIII. National Savings Certificates (NSC): Interest rate offended on NSC is 7.7 per cent a year. One can invest a minimum of ₹1,000 and there is no maximum limit.

IX. Kisan Vikas Patra (KVP): It offers 7.5 per cent per annum. The minimum investment is ₹1,000 and there is no maximum limit.

Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Business News Money Personal Finance Small Savings Schemes: These tax-saving instruments offer up to 7.5% interest. Should you invest?

Income tax news: Will FM Nirmala Sitharaman announce tax relief for taxpayers earning up to ₹15 lakh in Budget 2025?

On February 1, 2025, Finance Minister Nirmala Sitharaman may announce income tax relief for middle-class taxpayers in the Union Budget.

Updated28 Dec 2024, 10:48 AM IST

Every year, India’s salaried class Actively wait for relief in income tax. This year, the middle class is also surround all their hopes for FM Nirmala Sitharaman, when she presents Budget 2025 on February 1. According to a news agencies report, the government is actively considering tax relief for the middle class, particularly earning up to ₹15 lakh annually. The 2025 Budget on February 1, may include an announcement on the tax breaks. This action is intended to boost consumer spending and inspire the economy.

Income tax budget: Who will benefit?

If this is implemented, millions of taxpayers might benefit greatly, especially city and villager struggling with high living costs. Those choosing the 2020 tax scheme, which excludes exclusions like those for housing rents, would be eligible for this.

The most underrated SIP hack for a bigger mutual fund corpus

Investing consistently and increasing your SIP amount is key to wealth building for mutual fund investors

Updated28 Dec 2024, 06:27 AM IST

Investors like to chase returns because a higher return would mean a higher corpus. But is investing in a top-performing fund the only way to build a higher corpus? Well, not necessarily. Besides, it is practically impossible to always remain invested in a top-performing fund, because top performers change from time to time.

Top performing mutual  funds keep changing

Performance in the past does not guarantee future outcomes. It’s possible that mutual funds that do well one year won’t continue to do so in subsequent years. A fund that performs well in a bull market witness a sharp decline in a bear market and vice versa.

The below table show top 3 flexicap funds for different 3-year periods.

So, what should you do?

Increase the SIP amount instead of chasing a top performer. If you can invest a lumpsum amount, don’t shy away. As Saying as it may seem, the secret to building a larger mutual fund corpus lies in consistently increasing your Systematic investment plan (SIP) amount rather than obsessing over the returns. By following this strategy, you can easily beat the corpus you would have accumulated with top performing fund.

Loan insurance: What is it, and how does it impact your EMI and interest?

Loan insurance protects lenders if borrowers can’t repay due to unforeseen events like job loss , disability , or death

Published27 Dec 2024, 09:24 PM IST

When raising a personal loan lenders often the borrowers for loan insurance. This is to make sure that any unforeseen circumstance does not prevent the borrower from clearing the loan obligation.

Difficulty in loan repayment could arise due to unemployment, disability or even the borrower’s demise. Although it is optional to take insurance, it is highly recommended to minimize the impact of these wealthy events.

Loan insurance: These are the key characteristics

1. Just like any insurance, loan insurance entails an assurance given by the insurer to the lender that the loan will be repaid if the borrower fails to meet his obligation.

2. The insurer charges a premium for this insurance which is not paid separately but is added to the monthly instalment or the loan EMI

3. Loan insurance, although recommended, is not mandatory. Those who don’t want to take the added burden of insurance premiums can decide to overlook the benefits offered by it.

Personal Loan: How AI is boosting the lending ecosystem – 6 key points to know

Personal Loan: With the aid of algorithms, banks can evaluate eligibility of borrowers faster by analyzing credit scores, income data and spending patterns. Additionally, AI models go beyond traditional credit scores, incorporating non-traditional data such as social media activity.

Published27 Dec 2024, 07:40 PM IST

If you are planning to raise a personal loan for any reason, such as for a wedding or a vacation, the process is quite simple and convenient. From exploring different options for instant loans to finally choosing the right lender – almost everything has turned extremely simple and convenient. 

What has made the entire process a cakewalk is the advent of technology, particularly artificial intelligence or AI. There is no denying the fact that AI is transforming the lending ecosystem by optimizing processes for the banks as well as for borrowers.

Here we give a lowdown on how technology is transforming the entire lending process.

These are the 6 ways in which AI has transformed personal loan management:

1. Loan approvals: AI algorithms evaluate borrower eligibility faster by analyzing credit scores, income data and spending patterns. Additionally, AI models go beyond traditional credit scores, incorporating non-traditional data such as social media activity or utility payment histories.

HDFC credit card rewards points: How to redeem them for maximum benefits – check here

HDFC credit card reward points offer benefits like travel discounts, cashback, and retail vouchers. Redeeming points is simple through the bank’s online portal, allowing users to maximize their rewards. Always review terms and conditions for the best redemption options.

Published27 Dec 2024, 03:57 PM IST

Do you know whether you have been accumulating HDFC credit card reward points? Exciting benefits such as travel discounts, cashback, and retail vouchers can be availed of with these points. Here’s a quick guide to help you get the most out of your hard-earned points and awards.

What are credit cards?

A credit card is an inch in thickness and made of metal or plastic. It is provided by a bank or another institution for borrowing funds to be used in making purchases. It is like a loan granted for a short period of time. You receive a statement once monthly containing the breakdown of all your transactions and what you owe them in total. Credit cards can both be done online and offline.

1. The India Residential Real Estate
2. One of India’s most powerful economic foundations is real estate at right now
3. Financial literacy
4. compounding
5. process where the value of an investment increases because

Credit Cards or BNPL: Which short-term financing option is right for you?

Both credit cards and BNPL services provide unique benefits and drawbacks. Credit cards offer flexibility but risk high-interest debt, while BNPL enables small interest-free payments. Your financial situation and purchase type will guide your choice.

Published27 Dec 2024, 03:55 PM IST

Short-term finance options have increased in popularity in the fast-paced world of today. Credit cards and Buy Now, Pay Later (BNPL) services are among the most popular options. Let’s examine the main distinctions between these two choices so that you may make well-informed decisions regarding your financial requirements.

What are credit cards?

Financial companies issue credit cards, which allow consumers to pay for purchases up to some limit. With time, the cardholders can clear the amount with interest in most cases on the residual balance. Credit cards have several advantages apart from being convenient, such as offering travel insurance, purchase protection, and rewards programs.

Also Read | These 5 credit cards give cashback when you buy gadgets online

Benefits of credit cards

• Widespread acceptance: Credit cards are very adaptable because they are accepted by the majority of retailers in the world.
• Creates credit history: Your credit score can be established and raised with responsible use.
• Rewards & perks: Several credit cards are offered with rewards that include travel miles, points, cash back, and offers to exclusive deals.

Drawbacks of credit cards

• High interest rates: In case, if the balance is not paid off straight away, carrying on the balance might incur big time interest charges.
• Annual fees: Some credit cards have annual fees if not used wisely that would offset the benefits.
• Credit reports: Based on your credit worthiness, approval often requires conducting a credit report.

What is BNPL?

It is known as Buy Now, Pay Later or BNPL and gives the customer the facility of spreading the cost over a specific period of time; often in instalments, while working like a mini-loan to facilitate the process of making a weekly or monthly payment in place of a conventional credit card.

Benefits of BNPL

• Interest-free periods: All BNPL services have very short interest-free instalment plan periods.
• Easier approvals: The application procedure for BNPL is quicker, simpler, and more credit checks are done on customers.
• Fixed repayment programs: Repayments are spread out evenly in the budget.

Drawbacks of BNPL

• Less utility: BNPL services are accessible only to specific customers and merchants.
• Risk of spending too much: The convenience makes impulsive purchases and numerous recurring payments likely.
• Impact on credit and late fees: In case you miss payments, high late fees may be assessed against you, and if the credit bureaus are informed, your credit score may be negatively affected.