The Old Faithful - RD, NPS, PPF, Life Insurance Role in Fintech

What precisely is "The Old Faithful"?  Let's hear from Aritro.

Recurring Deposit (RD)

For investors with very low risk-tolerance, RD is the best option to save regularly, starting with small amounts. An RD can be opened either in a bank or in a post office for a small amount, and it is a great start to anyone’s investment journey. 

Public Provident Fund (PPF)

PPF is the most popular long term saving instrument as it provides tax-free returns and also provides tax exemptions under Section 80C.  A PPF account can be opened in a bank or in a post office, and the interest rates are decided by the government every quarter.  

National Pension Scheme (NPS)

It is a government-sponsored pension scheme. Earlier it was open to government employees only but since 2009 it is open to all for either lump-sum or regular, monthly investments. 

Life Insurance 

A typical Life Insurance product is not an investment product. It is a Protection product which is meant to provide a financial foundation to your family

The silent hero breaks out – Fixed Deposit 

Moving on in the next video you'll learn about the next investment product - the proverbial blue-eyed child of Indians across generations i.e.  Fixed Deposit. 

 A Fixed Deposit is a low-risk investment instrument that is offered by banks, post-offices and even Non-banking Financial Companies (NBFCs). 

Some of the important attributes of an FD are:

• Rate of return – Generally NBFCs and private banks offer a slightly higher rate of returns than government banks. The rates of return are also traditionally slightly higher for senior citizens 

• Tenure –  This is the period for which a FD should be invested. Generally, an FD can mature between 12 to 60 months. The principal and the interest amount are paid out to the investor at the end of this maturity period. An investor can also choose to liquidate or withdraw an FD before maturity, but there are generally lock-in periods and/or withdrawal charges

• Entry ticket size – Of all the traditional investment products, FD’s generally have a comparably higher ticket size

Moving on in the next session Aritro will take you through one of the most preferred Investment option in India - Gold.