The employer as well contributes with a matching amount. We have covered the following in this article:. The interest rate applicable to the EPF contributions is 8.
It is for this reason that VPF is considered a very attractive option to invest in. The current interest offered on VPF contributions is 8.
The Government of India, depending on various factors, periodically updates the interest rate offered of EPF. Hence, you can contribute as much as you want but the tax deductions available to the taxpayers is restricted to Rs 1,50, a year and one can save up to Rs 46, a year in taxes.
One can withdraw from their on VPF contributions if he or she is unemployed for more than two months or when they retire. Making VPF contributions is very simple and straightforward. The Voluntary Provident fund permits both complete withdrawals and partial ones in the form of a loan. For withdrawals before the minimum term of 5 years, tax is levied on the accumulated maturity sum.
The final maturity amount is paid after the resignation or retirement of the employee. In case of the sudden death of the account holder, their chosen nominee receives the accumulated sum under VPF.
Voluntary Provident Fund allows the withdrawal of money at any time. This makes Voluntary Provident Fund a dependable option in case of financial emergencies. Some rules and regulations under Voluntary Provident Fund that should be kept in mind are summed up as below:.
The rate of interest is set by the Government of India and is subject to change yearly. The interest rate can increase or decrease depending on the financial year. Voluntary Provident Fund can be opened at any time of a given financial year. Once the investment starts, it cannot be discontinued. Voluntary Provident Fund allows partial withdrawals in the form of loans. However, the withdrawn amount is taxable if it is withdrawn before the maturity date.
It is always better to have options. It provides unparalleled flexibility and control over your savings. Choosing a ULIP gives you more control over your savings and investments. Also, it protects you and your loved ones with a life cover.
Investing wisely will help you in achieving all the milestones of your life. Explore all the available options to buy the best savings plan for a secured financial future. Annual Income In Lacs. Flexibility of switching between the fund options to take benefits of market movements or change in risk preference. Every person has a unique reason to save and invest.
With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. Savings plan require you to invest a pre-decided amount on a regular basis.
People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Savings plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums.
These plans inculcate financial discipline in policyholders which make them crucial for every portfolio. A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. You are likely to create a large corpus by your retirement through market-linked returns.
If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you. The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal.
It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income. The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement.
The Smart Goals plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals. Interest is earned at the same rate as the EPF. Likewise, an employee also has no obligation to contribute to this plan.
It is important to note that once you have chosen to contribute to a voluntary provident fund, the same cannot be terminated or discontinued before the completion of base tenure of 5 years. The interest rate of such plans is decided by the Government of India at the starting of each financial year. When it comes to investment options in India, the Voluntary provident fund is considered as one of the best.
The employees are eligible for tax benefits of up to Rs. The interest received from these contributions is also exempt from tax. However, in case the rate of interest is more than 9. The rate of interest is set by the Indian Government and is revised every year. The rate of interest for FY is 8. Previously, the rate of interest was 8. Investments towards a VPF account is viable because of its high rate of interest and tax benefits.
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