There is no upper limit applicable on post office schemes, enabling investors to invest any amount of money as per their financial goals. These schemes offer guaranteed returns through interests of up to 8.7%. The premature withdrawal, chargeable at a penalty of 2%, ensures liquidity. Interest earned on post office schemes is taxable as per the investor’s income tax slab. Monthly deposits made towards these schemes generate dividends as per the applicable rate of interest, serving as a reliable source of monthly income.
The varied range of mutual fund schemes meets the unique investment objectives of every investor. Mutual fund investments made through Systematic Investment Plan (SIP) ensures that individuals can start investing with a nominal amount of Rs. 500. Investors can withdraw from their mutual fund scheme by paying an exit charge of 1% before the stipulated period.
| Parameters | Mutual Fund | Post Office |
|---|---|---|
| Guaranteed Returns | Returns are not guaranteed because they are exposed to market risks. | Offers guaranteed returns through interest rates of up to 8.7%. |
| Liquidity | Offers liquidity by enabling investors to withdraw against 1% exit charge. | Premature withdrawal is chargeable at 2% penalty. |
| Applicable taxes | Dividends are subject to a distribution tax of 13.84%. When fund units are sold within a year, it is taxable as per your personal income tax slab. For fund units sold after a year, the Long Term Capital Gains (LTCG) tax of 10% is applicable. | Earned interest is taxable as per your personal income tax slab. |
| Investment limit | No upper limit. | No upper limit applicable. |
| Monthly investment option | Easy monthly instalments for Systematic Investment Plan (SIP), starting as low as Rs. 500. | Monthly deposit applicable. |
Where to invest Post office schemes or mutual funds?
Every individual has their own financial objectives and risk appetites that should determine their investment options.
Which post office scheme is best?
You can consider the following post office schemes, as per your eligibility:
Is it good to invest in mutual funds now?
Mutual fund is one of the best investment options, irrespective of the time you want to invest in it. The wide range of mutual funds caters to varied investment objectives and risk appetites of investors.
Is it worth it to invest in post office scheme?
Here are some factors that make investing in a post office scheme an effective investment option:
Which is the best mutual fund investment for long term?
The following are some of the top long-term mutual fund investment schemes:
Can you lose your money in a mutual fund?
Mutual fund investments are exposed to market risks, which may lead to losses. However, keeping a close tab on the performance of funds in your portfolio will enable to avert losses due to market risks, unless in the case of an unforeseen inflation. Funds that are not performing well should be switched with other funds to prevent risks and ensure balance in the portfolio.
