Planning for retirement ensures a comfortable and stress-free old age, with steady income in the form of pensions.
Investment in reliable schemes can alleviate financial worries and provide substantial benefits post-retirement.
Voluntary Provident Fund (VPF)
What is VPF?
Voluntary Provident Fund allows employees to contribute beyond the mandated 12% of their basic salary into EPF. It offers an attractive interest rate of 8.1%, similar to EPF, and is managed as an extension of EPF.
Benefits of VPF
Contribution up to 100% of basic salary and DA.
Seamless transferability upon job change.
Eligibility for loans against the fund for various purposes.
Tax benefits under section 80C; tax-free returns on investment, interest, and maturity (EEE).
Equity Linked Savings Scheme (ELSS)
How ELSS Benefits You
ELSS is a tax-saving mutual fund scheme offered by 42 companies in India. It provides market-linked returns and requires a minimum investment of ₹5,000 for tax exemption up to ₹1.5 lakh under section 80C.
The scheme has a lock-in period of 3 years, after which withdrawals are permitted, offering flexibility in investment tenure.
Special Features
Market-linked returns averaging around 8.5% over the past decade.
Option for partial withdrawals and continued investment flexibility post-lock-in period.
Public Provident Fund (PPF)
Understanding PPF
PPF is a long-term investment scheme available at banks and post offices. It mandates a minimum deposit of ₹500 annually, up to a maximum of ₹1.5 lakh per annum, offering a fixed interest rate (currently 7.1%).
Benefits of PPF
Lock-in period of 15 years with options for extension.
Loans available after 3 years; partial withdrawals allowed from the 7th year.
Tax exemption under section 80C on investments.
Choosing the Right Investment Option
Each scheme—VPF, ELSS, and PPF—offers unique benefits suited to different investment preferences and risk tolerances.
VPF is ideal for employed individuals seeking higher returns akin to EPF, while ELSS suits those willing to take moderate risks for potentially higher returns.
PPF, on the other hand, appeals to risk-averse investors looking for stable, tax-efficient investment options.
By wisely choosing among these options, individuals can secure their financial future and enjoy a worry-free retirement.
