Popular Financial Products in India – June

In this article I shall provide a summary of those popular financial products in India that I had covered in June.

There are different types of financial products available in India. They all belong to three main categories – equity or shares, debt or bonds and insurance.

Equity
I did not cover any products under this category in June.

Debt
I covered three products National Savings Certificate (NSC), Fixed Deposits, Post Office Monthly Income Scheme and Public Provident Fund (PPF).

Insurance and Pension
In this category, I discussed two products, Atal Pension Yojana and Pradhan Mantri Suraksha Yojana.

National Savings Certificate (NSC)

National Savings Certificate (NSC) scheme is a savings scheme by the Postal Department of Government of India and is one of the most popular financial products in India especially among the common man.

National Savings Certificates are a type of saving bonds issued by the Government, where money has to be invested for a fixed period after which the investor gets back his original amount and an additional interest.

For the common man, NSC is a very good investment option because it is safe, simple and has tax benefits.

Read more about it in the article titled National Savings Certificate (NSC).

In a latter post I have talked about the 7 things about National Savings Certificate which someone must know before deciding whether to invest or not.National Savings Certificate (NSC)

I have analyzed NSC from the following perspectives – safety, denomination, buyer, interest rate, taxability of interest income, tax benefits and use as collateral security against loan.

Post Office Monthly Income Scheme

Post Office Monthly Income Scheme is a guaranteed monthly income product by government of India.
The features of POMIS are as below.

  • An investor invests some amount.
  • He will get a monthly income.
  • At the end of 5 years, he will get back his initial investment.

The four main benefits of POMIS are that:

  1. The investment is safe.
  2. It offers fixed monthly income.
  3. It has higher interest than other debt products.
  4. There is no TDS in POMIS. But wherever applicable, the investor must pay his taxes.

For all these reasons, Post Office Monthly Income Scheme is one of the most popular financial products in India among senior citizens, retired people and risk-averse investors.

For more details please read the article titled Post Office Monthly Income Scheme.

Public Provident Fund (PPF)

Public Provident Fund (PPF) is a Savings cum tax-Savings Scheme introduced by the National Savings organization of India in 1968.

Once a person enrolls for PPF, he has to invest some amount in the scheme every year for 15 years. The invested amount earns interest and helps in building wealth.

It is a long term investment option. It helps the investor to build wealth and to meet his long term objectives, like his retirement, children’s marriage or education.

It also has tax benefits. Investment is tax-deductible under 80C, and interest is tax free.

Public Provident Fund (PPF) is therefore one of the most popular financial products in India among the common man of India to build wealth over a long term.

For more details please read the article titled Public Provident Fund (PPF)

Pradhan Mantri Suraksha Bima Yojana

Personal Accident InsuranceThe Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a one year Personal Accident Insurance scheme. It offers protection against death or disability due to accident.

In this scheme, a person has to pay Rs 12 insurance premium. If he suffers serious injuries due to an accident, he can get upto Rs 2 lakhs. If he dies in the accident, his beneficiary will get upto Rs 2 lakhs insurance cover.

Read more in this review of Pradhan Mantri Suraksha Bima Yojana.

Atal Pension Yojana Scheme

Atal Pension Yojana Scheme, also known as APY, is a pension scheme launched by government of India.

Depending on the contribution made by a person of age starting from 18 and 40, at the age of 60, a sum of 1,000, 2,000, 3,000, 4,000, or 5,000 will be paid monthly.

For people who are not investment experts, this is a good pension scheme.

Read more about this in my review of Atal Pension Yojana Scheme.

A Few Last Words

That’s it for today. Hope you have been enjoying the posts.

I hope you found this summary of financial products in India covered so far useful. If you have something to add please leave a comment in the post. Please feel free to contact me.

Before making any investment decision, please contact your financial adviser. I have provided this article on some of the most popular financial products in India for educational purpose only.

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Reference

Subhodeep Mukhopadhyay

I am a Management Consultant in the Education Sector. In my previous corporate career, I have worked in Banking, Private Equity and Software industry. I am an MBA in Finance/ Computer Engineer and enjoy doing equity research and financial analysis in my free time.

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