The lifestyle of all of us is changing very fast. Even after retirement, we need a good amount of money every month. However, your income is minimal after retiring. An enormous retirement fund is needed by all. Any person should start saving for retirement in the early days of his job. This helps us to raise a considerable amount by the time of retirement. There are many schemes related to retirement funds. These include schemes such as Employees Provident Fund (EPF), Public Provident Fund (PPF), Voluntary Provident Fund (VPF), and National Pension System (NPS).
Most of these schemes are long term deposit plans and give high returns. Any customer must be aware of all these when choosing one of these investment plans. The customer will find out in such a way as to which is the most accurate plan for him. Let's know about these schemes in detail.
VPF:
VPF is the extension of EPF. This means that investors can go for VPF only when they have an EPF account. Like EPF, VPF gets 8.5% interest. If the employee deposits more than 12% of his basic salary and DA in the PF fund, it is called VPF or Voluntary Provident Fund. Any salaried employee can deposit up to 100% of his basic salary and DA in VPF. Under this scheme, investors can get a much higher return in the long run by increasing their contribution to EPF.
PPF:
PPF is an excellent investment option for creating retirement funds. PPF is a savings scheme supported by the government. The most important thing about PPF is that it comes with EEE status. That is, this investment scheme gets interest subvention at three levels. The scheme also has a tax-free maturity amount and interest income. By investing in this scheme, investors can save income tax of Rs 1.5 lakh every year. The scheme comes with a lock-in period of 15 years. It can be extended further. The rate of interest on PPF is 7.1 percent. Those who want to make risk-free investments and do not want to opt for long-term investment options like NPS or VPF can invest in PPF.
EPF:
Every company with more than twenty employees is required to contribute to the Provident Fund of its employees. In the employee's PF account, 12% of his basic salary and DA are deposited by the employee and the same by the company. The EPF also includes pension funds. It is provided to the employee after retirement. The rate of interest on EPF is 8.5% in the current quarter. Under certain circumstances, investors can withdraw from their EPF account before maturity.
NPS:
It was mainly launched for government employees in the year 2004. Again, in the year 2009, the general citizens were also opened. People aged 18 to 60 years can invest in the national pension system. An account can be opened under the scheme by visiting almost all public and private banks in the country. NPS is managed like mutual funds. This can result in an outstanding return from this investment option. In NPS, the investor has to deposit some amount per month during his job.
Investors can withdraw apart from the funds prepared after retirement and take the annuity for regular income from the remaining amount. The NPS is invested in three kinds. First equity, second corporate bond, and third government securities. Here the investor gets two options to determine his investment. First asset relocation and second auto voice. Auto voice initially 50% share in equity and decreases over time. In asset relocation, investors can invest up to 75% in equity.
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