Name :- Himanshu Narang

Erp :- 0191mba065

Assignment
5 best investment options
At the age of 40, the person can opt for the 5 best investment schemes.

1) Equity Mutual Funds :- The first option is mutual fund, where the person
can invest in Axis Bluecip fund which is a large cap fund type. Its an equity
fund. The 3 year return is 8.25% and 5 year return is 8.75% at present situation
and 1 year return is 9.14%. With the SIP of 5000 for 3 years, the person gets
maturity amount of 213,024 with 11.23% CAGR return.

2) RBI Floating Bonds :-

The government has announced the launch of Floating Rate Savings Bonds,
2020 (Taxable) with an interest rate of 7.15 per cent.
The bonds are available for subscription July 1, 2020 onwards.
As per the Reserve Bank of India (RBI) press release, the interest rate on these
bonds will be reset every six months, the first reset being on January 01, 2021.
There is no option to pay interest on cumulative basis i.e. interest will be
payable every six months instead of having an option to receive it at maturity.

Floating rate saving bond (FRS) comes with a minimum investment of Rs 1,000
and there is no limit prescribed on the amount of money you can invest. Tenure
is seven years. Both resident individuals and HUF can invest in these bonds, but
non-resident individuals are not allowed to invest. Bonds can be bought from
public sector banks and select private sector banks like Axis Bank, IDBI Bank,
HDFC Bank and ICICI Bank. The interest payable on January 1 and July 1 will
be linked to the then prevailing rate of interest on National Saving Certificate
(NSC). FRS will pay 35 basis points more than the rate offered on NSC.

3) Public Provident Fund :-

The Public Provident Fund (PPF) is one of the most popular investment options
in India because of its sovereign guarantee. Some of its features are:
a) Investment offers tax benefit under section 80C, interest earned and
maturity are also exempt from tax.
b) The scheme has a lock-in period of 15 years.
c) Post maturity, the account can be extended in block of five years for any
number of times.
d) The interest rate is reviewed by the Government every quarter. Currently,
for the interest rate offered is 7.1% a year which is slashed from 7.9% due to
COVID19.
e) The scheme also offers loan and partial withdrawals.

4) National Pension System :-

a) The scheme offers two choices: Auto choice and Active choice. In auto
choice mode, your contribution is divided among various assets based on your
age (Life Cycle Fund). On the other hand, under the active choice, you decide
the ratio in which funds are to be invested in different asset classes.
b) The scheme matures when the investor turns 60 years of age. The lock-in
period depends on the entry age of the investor. For example, if you start
investing in NPS at the age of 25 years, then the lock-in period will be 35 years.
c) The returns of NPS are market-linked. Amount of pension you will
receive post-maturity will depend on the amount of corpus accumulated by you.
NPS offers tax benefit under section 80C for a maximum of Rs 1.5 lakh and an
additional tax benefit of Rs 50,000 under section 80CCD (1B). However, at the
time of maturity, only 40 percent of the corpus, if redeemed as a lump sum, will
be tax-exempt. Pension received will be fully taxable as per your income. No
tax is payable during the accumulation period.
The current interest rate on the National Pension Scheme (NPS) as of February
2020 ranges from 9% to 12% depending on the type of scheme and subscriber.