SCSS, PPF and SSY: Savings schemes with highest returns; Know features, benefits and other details timesnownews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from timesnownews.com Daily Mail and Mail on Sunday newspapers.
Smart ways to compound your debt investment returns
If selected properly, fixed income investments can be more predictable compounders of wealth
Money managers and financial advisors, when pitching financial products to you, love to cite Einstein on compounding being the eighth wonder of the world. Then, they do their best to convince you that if you want to benefit from compounding, you should be maxing out your equity investments. But if you give it a bit of thought, debt investments often turn out to be more predictable compounders of wealth for Indian investors, than equities.
Steadier compounding
In equities, your returns come in fits and starts. You may make a 30 per cent return one year, lose 15 per cent of it in the second year and gain back 10 per cent in the third year. But such zig-zag returns from stock prices don’t really make for steady compounding of your money.
The reversal of the small savings interest rate cut was the right decision, but it was definitely not enough. The government should ensure that senior citizens who have no other source of income get a special deal in terms of the interest rates they earn.
Highlights
The investments can be done with as little as Rs 250 and with multiples of Rs 150 and an annual cap of Rs 1,50,000 in a financial year.
The Senior Citizens Savings Scheme (SCSS) provides security to retired employees who want an assured return.
The PPF account can be opened with a minimum amount of Rs 500 and the maximum can go up to Rs 1.5 lakh with a maturity period of 15 years.
There are several government schemes that are worthy of investment and with the Modi government promising to not reduce the interest rates of saving schemes, there is icing on the cake for the employees.