Financial Planning

Since both VPF (as part of EPF) and PPF have long-term maturity periods, these are best-suited to act as retirement planning tools If you choose to invest additional sums in debt instruments, how do you choose between the VPF (Voluntary Provident Fund) and PPF (Public Provident Fund)? So, even though all of us (or most of us) know that having exposure to equity via mutual funds is advisable for long-term investments, this article simply focuses on the debt side and tries to help pick between PPF and VPF for the long term. The VPF currently offers 8.65 per cent annually, while the PPF offers 7.9 per cent. So, on an as-is basis, the VPF wins over PPF. But would the VPF offers more than the PPF always? An analysis of the historical interest rates shows that the VPF almost always gives higher returns than the PPF. When it comes to returns, VPF is the clear winner. Putting returns in perspective But we should never focus on returns alone. It’s always advisable to asse...

                        The SSY is a very illiquid product and should be chosen only if it suits the investor’s actual objective of accumulating savings for the girl child’s future. As a parent, saving for your children’s future is a big responsibility. And many times, and understandably, people are willing to sacrifice retirement savings for their children’s future. If you have a young daughter, then you would have come across the Sukanya Samriddhi Yojana (SSY) many times. But is it a good option? And does it make sense for everyone who has a daughter to invest in the SSY? Small savings, higher returns Being part of government’s small savings schemes, the SSY often gets compared with products such as the PPF (public provident fund). The SSY does give higher returns, of 8.4 per cent, than PPF (7.9 per cent).But ‘higher returns’ alone shouldn’t sway your investment decision.The SSY has certain in-built restrict...