Confuse between investment tools?

Confuse between investment tools?

In previous blogs, we discussed investment purpose, maximization of savings, investment planning, but when it comes to investment planning than a very first thought  come to our mind is where to invest?

 We see so many advertisements on media nowadays and all of them use different themes to attract customers. Choosing the best investment option is the key to our financial security.

In this blog, we will study different types of investment options along with the suitability of them to different age groups and class of people. I will try to elaborate on all the tools very precisely so that it could be easily understood.  Below are some of the tools :

https://bijimoney.blogspot.com/2020/06/are-these-investment-options-attractive.html

 

Investing Tools	Bank FD	Public Provident Fund(PPF)	National Pension Scheme(NPS)	National Savings Certificate (NSC)
Description	We keep our money with the banks and in return bank gives us a fixed interest on our investment.	PPF is another safest mode to save money, this account can be opened in a bank or post office. Anybody can open this account.	It is voluntary contribution pension system regulated by Pension Fund Regulatory and Development Authority (PFRDA), created by an Act of the Parliament of India.	The National Savings Certificate is a fixed-income investment tool that you can open with any post office. You can buy it from the nearest post office.
Important point	rate of interest varies as per, the value of money and time duration and age of the person, for senior citizen bank, offers a high rate of interest.	Investment to be made in a block of 5 years after completion of a fixed period that is 15 years of investment.	NPS investors put money in a combination of funds. Combination of equity, corporate debt, and gilt funds.	Anyone looking for a safe investment avenue to save taxes can go with this tool of investment. The maturity period is 5 years of this scheme.
Doubling period	As per "rule 72" means you just have to divide 72 by annual interest rate is the doubling period so the doubling rate of Bank FD is approx. 13 years nowadays.	PPF will take 9 years to double your money	Doubling rate is better than FD and PPF but uncertainty is there due to equity exposure.	NSC will take 8 years to double your money.
Tax benefit	Tax free FD (subject to the limit of 1.5 lakh yearly)	TAX free income (subject to the limit of 1.5 lakh yearly)	Additional deduction up to 50 k above 1.5 lakh.	TAX free income (subject to the limit of 1.5 lakh yearly)
Pros of investing	Fixed interest rate, safe, tension-free investment	Higher rate of return. PPF accounts come with EEE (exempt, exempt, exempt) tax category, which means an investor is not liable to pay tax at all three levels - investment, earning and withdrawal	Rate of return is better than PPF. People can voluntary participate in this scheme who want pension after their retirement.	Banks and non-banking financial institutions accept NSC as a collateral or security for secured loans. Safe like FDs and better return than bank FDs.
Cons of investing	You cannot beat inflation and tax from FD.  Suppose you are buying your annual household grocery in Rs 50k today then by next year you have to pay more for the same products due to an increase in  inflation rate and if you calculate then it will come near 9% including tax. FD rate is decreasing every quarter and the inflation rate is increasing so how we will manage.	Blocking period of 15 years  You cannot use this principle or interest to pay back your loans till 15 years.	NPS account allows partial withdrawal maximum of three times during the entire tenure of the NPS account. Annuity with 40% of the corpus can restrict his ability to fight inflation.	Blocking period of 5 years Less returns.
Risk profile	No Risk	No risk	Little risk as there is exposure in equity	No risk
Time duration	As per your convenience Note: Tax saver FD is for 5 years.	Minimum 15 years, after 6 years you can take a loan on deposits. partial withdrawal is possible after 6 years	Till 60 years of age.	5 years