How many types of retirement funds are there, how can get better benefits, here are all the answers

Retirement Planning: If you want to invest for the long term, then here we have given information about different types of retirement funds for you. You can earn good profits by investing in Public Provident Fund (PPF), Voluntary Provident Fund (VPF) and ELSS and NPS.

Retirement Planning: If you want to spend your old age without any problem, then you should start your retirement from now itself. There are many schemes available in the market for retirement planning. However, some special schemes are excellent for post-60 preparations, in which the return on investment can also be excellent.

If you want to invest for the long term, then here we have given information about different types of retirement funds for you. You can earn good profits by investing in Public Provident Fund (PPF), Voluntary Provident Fund (VPF) and ELSS and NPS.

How many types of retirement funds are there?

public provident fund

You can open Public Provident Fund ie PPF anywhere in the bank or post office. Also, you can transfer it to any bank or post office. You only need 500 rupees to open it. It is necessary to deposit 500 rupees every year at one go. Maximum Rs 1.5 lakh can be deposited in the account every year. This scheme is for 15 years, you cannot withdraw money in between. It can be extended for 5-5 years after 15 years.

Voluntary Provident Fund (VPF)

Only 12% of basic salary can be contributed in EPF. But, there is no limit to invest in VPF (Voluntary Provident Fund). Means if the employee increases the contribution to provident fund by keeping his in-hand salary low, then this option is called VPF. In VPF also, 8.1 percent interest is being given similar to EPF. This scheme is an extension of EPF only. Only employed people can open it. 100% of basic salary and DA (Dearness allowance) can be invested in it.

You have to contact the HR or Finance team of your company. Contribution has to be requested in VPF. VPF will be linked to your EPF account as soon as the process is done. No separate account is opened for VPF. VPF contribution can be revised every year. However, the employer is not bound to invest in VPF. The employee can only increase his contribution.

ELSS- Equity Linked Savings Scheme

There are 42 mutual fund companies running tax saving schemes in India. Every company has ELSS plan to save income tax. It can be bought online or from an agent. To save income tax, one time investment limit is minimum 5 thousand rupees and if you want to invest every month, then you can start investing minimum 500 rupees a month. Maximum tax exemption of Rs 1.5 lakh is available in this. Also, there is no limit of maximum investment in it.

Where should I invest?

You can get tax deduction on investment in all the three options. But, still all three are schemes with different benefits. It would be right for salaried class people to invest in VPF. Because from here you get more returns in comparison to PPF and ELSS. Whereas, if you are able to take some risk then ELSS can be a better option. Money should be invested in this through SIP, in which you can do monthly savings. This reduces the risk on investment and increases the chances of getting good returns. On the other hand, if you want to stay away from market risk, then it would be right to invest in PPF.