Best investment option in ppf / MIS , NSC or any other like this?

I want to know that what is best investment option among FD in Bank, Post office, Monthly income Scheme , Kishan Vikas Patra and PPF and any other like that and why ?

# Maximum Limit of Investment

# Tax liablility

# if someone deposit in MIS Rs. 490000 in 10 seperate MIS passbook of Rs 49000 each in single name of Mr. x, my question is whether Post office deduct TDS on this investment.
# is there benifits or loss to deposit all amount in single name / in single passbook
# Return Rates on above investment

4 Replies to “Best investment option in ppf / MIS , NSC or any other like this?”

  1. I may not be able to answer all your queries. However, if you want maximum returns from these investments, the best option will be to deposit the lumpsum amount you have in post office MIS and deposit the monthly interests in post office RD. You can have a standing instruction so that the monthly interests from MIS is directly credited to post office RD or your agent will be able to handle it for you. Together, I think, it will give you about 10.5-11% returns (before tax of course) and that is the maximum you can get in the present interest regime.

  2. It depends upon your purpose of investing. If you are investing for tax rebate and superior returns, then I think PPF is the best scheme. For one, it is highly flexible. You can invest a minimum of Rs. 100 and max. of Rs. 70,000 per year. Secondly, it offers tax free returns. Interest on NSC and MIS or Bank FDs is fully taxable (not even 1 rupee is exempt) whereas entire interest that accrues in your PPF account is fully tax free! You can withdraw part of your accumulation after 7 years or even take a loan after 4 years. PPF currently offers 8% pa.a. return, same as NSC, MIS and most bank FDs. To my knowledge, there is no TDS on interest on MIS. Hence it makes no sense to open 10 different MIS accounts to escape TDS.

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