Are you of the opinion that investing in financial schemes is a complete waste of time because they don’t meet your needs? If yes, then let us clear that notion. India is a country that lags in financial literacy. Hence, most of us aren’t aware of the options available to us or even bother to search for different kinds of services.
Today we bring you information about some lesser known yet extremely beneficial schemes available in our country. But before you read any further please remember, your investment decisions must be based on various factors like your income, financial goals, and risk appetite.
1. National Pension Scheme
National Pension Scheme (NPS) is operated by the government to promote your retirement needs and to make it easier for you to save a predefined amount every month. Though NPS was widely used by the masses till the 90s, the scheme has lost some of its popularity in the new millennium. However, it still remains as one of the safest retirement planning schemes available to you.
The NPS is open to those in the 18-60 years age bracket and is a simple scheme where you can contribute an amount monthly to get a return after retirement. The contribution made by you is invested in various avenues like public companies, index based stocks, etc.
There are two types of NPS schemes:
Tier 1 Account:
Withdrawal from this account is restricted to maximize the benefits you get on maturity.
Tier 2 Account:
A more flexible variant, this account is a voluntary contribution account that allows you to withdraw at your will.
2. Chit Funds
Investing in chit funds is an age old practice that is still followed in India and has even gained global popularity over the last couple of centuries. A chit fund is group borrowing and saving scheme in which people come together to save a certain amount of money every month. The pot that is collected in each cycle can be borrowed by any member (who hasn’t already borrowed from the same group) in order to meet their short-term and mid-term goals.
Despite the new age financial tools becoming popular in the last decade or two, Chit Funds are still among the most popular financial instruments in India. The main benefits of participating in chit funds are the easy access one gets to a larger sum of money, the flexibility to borrow when the need arises, better rates of borrowing than traditional loans, and better returns than bank products for savers.
In a chit fund, money flows smoothly within the group. The borrower belongs to the group itself and every group member receives high returns every month. In effect, chit funds turn out to be better in terms of returns compared to banks and the post office.And unlike mutual funds and equity investments, a chit fund is not subject to any market risk, so your returns are always safe. Chit funds are the best example of ‘money from the people, for the people, and back to the people’.
Now with KyePot – India’s (and the world’s) first group borrowing and saving mobile app for chit funds, you can easily participate in a chit fund from your smartphone itself.
3. Sukanya Samriddhi Account
A new government initiative, Sukanya Samriddhi Account hasn’t yet become well-known in the country. This scheme, launched in 2015, was created for the the parents of a girl child, encouraging them to build a corpus for their beloved daughter. Providing attractive returns of 8.6%, the savings account can be opened by her parents or guardians from the moment she is born till she turns 10 years old. The minimum deposit is Rs.1,000 and the maximum is Rs.1,50,000 for one year. The benefits of this scheme include tax exemption, partial withdrawal, and flexible deposits. To open an account for your darling daughter, head on over to any public sector bank or a post office.
Real Estate Investment Trust or REITs is a scheme much like mutual funds, but the underlying asset here is real estate. REITs deal mostly with infrastructure like malls and other public properties.
Globally REITs have proven to be a lucrative investment tool. The Indian market however has not yet seen the rollout, with many projects and schemes being planned and SEBI still amending the regulations around them. However, this is one investment option that you need to start considering if you want to be the early bird that catches the best returns!
We know that planning for and achieving your goals is not easy. That is why we have built the simplest way to achieve your financial goals – the KyePot app. If you need any assistance, please get in touch with us and our financial advisors will help you choose the right scheme for your needs.