Fixed Income Instruments

Fixed Deposits(FD)

A Fixed Deposit (FD) is one of the safest and most popular investment options offered by banks and financial institutions, ideal for individuals looking for guaranteed returns with minimal risk. With an FD, investors deposit a lump sum amount for a specified tenure, ranging from a few months to several years, and earn a fixed interest rate on their investment. The interest rates are typically higher than those of a regular savings account, making it an attractive option for conservative investors.

The key benefit of a fixed deposit is that it provides assured returns, irrespective of market fluctuations, ensuring financial security. Investors can choose to receive the interest periodically (monthly, quarterly, or annually) or reinvest it for compounding over the deposit period. FD tenures are flexible, allowing individuals to select the term that aligns with their financial goals, whether it’s for short-term savings or long-term wealth creation.

Moreover, Fixed Deposits are also eligible for tax-saving benefits under Section 80C of the Income Tax Act, if held for a tenure of five years or more. However, the interest earned is taxable, and tax deduction at source (TDS) is applicable if the interest income exceeds the prescribed limit.

FDs are ideal for those seeking stable, low-risk investment options, such as retirees or individuals with low risk tolerance. By incorporating Fixed Deposits into a well-balanced financial plan, investors can ensure steady growth of their savings while mitigating exposure to market volatility.

Public Provident Fund(PPF)

The Public Provident Fund (PPF) is a long-term savings and investment scheme introduced by the Government of India, offering attractive returns with tax benefits. It is a popular financial instrument for individuals looking to build a secure retirement corpus, as it combines safety, steady returns, and tax-saving features. The scheme allows individuals to invest a minimum of ₹500 and a maximum of ₹1.5 lakh per financial year, with an investment tenure of 15 years, which can be extended in blocks of 5 years.

PPF offers an attractive interest rate, which is determined by the government and compounded annually, making it a reliable option for conservative investors. One of the key advantages is that it falls under the Exempt-Exempt-Exempt (EEE) category, meaning contributions, interest earned, and withdrawals are all exempt from tax under Section 80C of the Income Tax Act.

The PPF account also offers partial withdrawals after the sixth year, and loans can be taken against the balance from the third year onward, providing liquidity during emergencies. Moreover, PPF accounts can be opened at post offices and designated banks, making it easily accessible to a wide range of investors.

This scheme is ideal for individuals seeking a low-risk investment option with long-term benefits, particularly those looking for retirement planning or tax-saving opportunities. For effective financial management, including PPF as part of your portfolio can ensure a balanced approach to wealth creation, tax efficiency, and financial security.

National Savings Certificates(NSC)

National Savings Certificates (NSC) are a secure and government-backed investment option, ideal for individuals seeking guaranteed returns with tax-saving benefits. At Econofin Loan and Fund Management Solution, we recommend NSCs for conservative investors looking for a low-risk way to grow their savings while enjoying tax deductions under Section 80C of the Income Tax Act. With a fixed interest rate and a tenure of 5 years, NSCs offer stability and assured returns, making them a reliable choice for long-term financial planning. These certificates are perfect for those prioritizing safety and steady growth in their investment portfolio.