Key investment plans to keep your future secured while you earn, learn and aspire to dream big

Key investment plans to keep your future secured

1. The Public Provident Fund (PPF) Scheme

The Public Provident Fund (PPF) Scheme, is a tax-exempt investment fundpath that was presented by the Ministry of Finance (MoF) in India in the year 1968. Premium earned on deposits in the PPF account are tax free. This makes the PPF Scheme a standout amongst the most expense effective instruments in India.

Table 1: Last 10 years of interest rate returns in PPF scheme

Financial Year Interest rate (p.a.)
2008 – 2009 8.00%
2009 – 2010 8.00%
2010 – 2011 8.00%
2011 – 2012 8.60%
2012 – 2013 8.80%
2013 – 2014 8.70%
2014 – 2015 8.70%
2015 – 2016 8.70%
2016 – 2017 8.10%
2017 – 2018 7.90%


Source: Ministry of Finance

2. SIP (Systematic Investment Plan)

A sort of venture conspire offered by common reserve organizations. Utilizing SIP one can contribute little sum periodically (week after week, month to month, quaterly) into an account.

They offer tax breaks under the Section 80C of Income Tax Act 1961. ELSS (Equity Linked Savings Scheme)can be contributed utilizing both SIP and single amounts venture alternatives. There is a 3 years secure period, and in this manner has better Liquidity contrasted with Public Provident Fund.

Table 2: SIP Mutual Funds to invest in 2017 and their returns

Mutual fund scheme Assets under management (Rs. Crores) 3 months 1 year 3 year 5 year
Birla SL Frontline Equity 13,634 10.60% 19.30% 19.70% 18.00%
ICICI Pru Top 100 Fund 1,457 13.60% 23.80% 21.90% 17.00%
ICICI Pru Focused Bluechip Equity 11,868 10.50% 17.50% 22.20% 16.30%
Franklin (I) Smaller Cos 3,494 12.90% 26.40% 46.80% 29.00%
DSP-BR Micro Cap Fund 3,399 12.60% 26.60% 54.40% 28.00%
Mirae Emerging Bluechip Fund 2,122 15.30% 25.50% 46.40% 28.00%
Kotak Select Focus Fund 5,481 13.20% 19.60% 29.70% 19.70%
Principal Emerging Bluechip 586 17.00% 23.00% 42.40% 26.00%
ICICI Pru Balanced Fund 3,477 12.00% 18.00% 25.00% 17.80%
HDFC Balanced Fund 6,657 8.70% 15.50% 27.80% 17.00%

Disclaimer: Please note that these mutual funds are ranked and recommended on their past performance and based on our understanding of the stock market, below we mention the returns yielded for the past 5 years.

Scenario analysis of the returns; if you had invested Rs. 1,000 every month for 5 years equaling Rs. 60,000, the investment would have grown to:

Mutual fund scheme Amount after 5 years
Birla SL Frontline Equity 97,000
ICICI Pru Top 100 Fund 91,500
ICICI Pru Focused Bluechip Equity 91,400
Franklin (I) Smaller Cos 134,000
DSP-BR Micro Cap Fund 142,000
Mirae Emerging Bluechip Fund 132,000
Kotak Select Focus Fund 104,000
Principal Emerging Bluechip 124,000
ICICI Pru Balanced Fund 96,400
HDFC Balanced Fund 97,000

Source: Moneycontrol.com, NSE, BSE

3. ELSS (Equity Linked Savings Scheme) Funds

The fund comes with a lock-in period of three years and is categorized under EEE tax rule(Exempt-Exempt-Exempt). With no limits for investments under Section 80C, however the maximum tax benefit is limited to Rs 1.5 lakh. The fund provides a fair chance to get better returns to overcome inflation over a period of time.

The average returns for the last 5 years is around 12%, let us showcase the top 5 ELSS mutual fund schemes:

Table 3: Top 5 ELSS mutual fund schemes 2017-2018

ELSS tax saving mutual funds Inception date Last 5 years returns in % Last 10 years returns in %
DSP Blackrock tax saver fund 2007 20.6 15.6
Birla sunlife tax paln 1999 19.4 12
Birla sunlife tax relief 96 1996 20.1 12.6
Franklin India taxshield fund 1999 18.3 15.3
Axis long term equity fund 2009 22.5 Not available

Source: Moneycontrol.com

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