Finance

NPS Vs Other Tax Saving Investments: Where Should A Tax Saver Invest?

You may be interested in other factors, besides building a sufficient corpus. A key factor in saving taxes is the ability to invest in instruments such as NPS. NPS offers investors tax benefits that can help them save even more money. Section 80C allows you to apply for a tax exemption up to 10% of the NPS contribution paid by your employer. Let’s now compare NPS to other instruments such as FDs and PPF. Based on returns, liquidity options and tax benefits.

Tax Benefits

ELSS, i.e. Equity Linked Savings Scheme allows you to claim a tax deduction up to Rs. Section 80C of the Income Tax Act provides a deduction up to Rs. 1,50,000 PPF, on the other hand, provides 100% tax exempt for the invested amount and interest earnings. However, you will need to pay taxes for the NPS pension you receive after retirement. If you are only interested in saving taxes, PPF may be a better option than other investment options.

Tax-saving FDs can also help you save up to Rs. 1.5 lakhs, but to get this benefit you must keep your deposits locked up for at least 5years. You cannot withdraw your tax-saving funds prematurely, and the withdrawal policies for the NPS Scheme can be complex. You can instead invest in a corporate fixed deposit such as Bajaj Finance FD, which offers a high rate of interest at 6.75% and flexible tenor range. There are also other outstanding features, which are listed below.

Senior Citizens Get Higher Interest Rates

Senior citizens receive a 0.25% lower Bajaj Finance FD interest rate. You can withdraw higher periodic interest rates if you are a senior citizen by investing in a noncumulative Bajaj Finance FFD.

You can also withdraw interest at any time, whether it is after a month, quarter, year or six-month, depending on your investment. Instead of investing in NPS to build a retirement corpus, you can instead invest in Bajaj Finance FD. You can use FD calculator to estimate how much you could earn for 20 years or 25 years, as well as any other number of years you have until you retire.

Bajaj Finance Noncumulative FD offers a period interest payout, which is similar to NPS. This will allow you to meet your financial needs after retirement.

Online Investment Procedure

Bajaj Finance offers a complete online process for its FD investors. You don’t even need to leave your home once you have completed the online payment and verified the documents. The online FD form allows you to invest in an FD instantly. Online investors will also be subject to a 0.10% increase in the FD rate.

Easy Investment And Withdrawal Policies

Bajaj Finance FD has a lenient withdrawal policy. This is evident in the fact that deposits can be withdrawn at any time after the tenor of three months. Bajaj Finance offers a loan against FD that allows you to keep your investment even in times of financial crisis.

You can choose from a tenor term of 12 to 60 months. Additionally, you have the option to set the auto-renewal option during the application process so that your returns are automatically reinvested for the same period. It is a better option for investors in 2021 because of its flexible investment policies and the lenient withdrawal terms.

When choosing an instrument, saving taxes may be one of your top priorities. To receive tax benefits, you can invest in a tax saving FD, NPS or PPF. These instruments may not offer the flexibility you would expect in terms of investment process and withdrawal norms. Bajaj Finance FD has all of these features. It also offers a high FD Rate of 6.75%, and an online investment process. It’s also a reliable investment platform that offers higher FD rates for senior citizens and online investors.

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