4.5 Other Investment Products

In this chapter, we explore a few other investment products which may provide good returns. These products will help balance the risk which market-driven products may carry. Hence, you must consider having them in your investment portfolio.

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Public Provident Fund (PPF)

PPF is a scheme provided by the Government of India to help people build a corpus of money for future use. You can invest anywhere between Rs. 500 to Rs. 150000 in a financial year. The account’s customary tenure is fifteen years and subsequently can be extended in blocks of five years. Withdrawals are not allowed up to the completion of six years of the account. From the seventh year, one withdrawal per year is allowed. PPF is a risk-free return product where the returns are exempt from taxes.

Employees’ Provident Fund (EPF)

EPF is a form of social security fund provided by the Employee Provident Fund Organization (EPFO), a statutory body by the Government of India. Salaried employees make monthly contributions from their salaries towards the funds. These contributions are matched by the employers’ contributions to the fund as well. The corpus thus created can be withdrawn or transferred when you switch to another employer or after your retirement.

National Pension Scheme (NPS)

NPS is a scheme sponsored by the Government of India to help provide pensions to people after retirement. It is a scheme to voluntarily contribute a certain amount at regular intervals throughout your working life. Upon retirement, you can withdraw a certain percentage of the corpus. The remaining amount is paid to you as a monthly pension. Since the Government of India backs it, it is considered a risk-free mode of investment.

Cryptocurrencies

 Cryptocurrencies are media of exchange that can use to buy goods and services. They can also trade in markets. In other words, they are digital forms of money that are decentralised. They don’t have an official regulatory body. They are created and managed by independent entities connected to help validate the authenticity of trades and transactions. This system is called a blockchain. The creation of cryptocurrency is called mining. Bitcoin is an example of a cryptocurrency. In India, the RBI doesn’t recommend investing or transacting in cryptocurrencies as there are concerns about the acceptability and robustness of the system. But in a short period since their inception, cryptocurrencies have grown in value exponentially.