Wealth management through savings and investments is crucial for long-term financial independence and social security. Pension schemes are investing strategies that reserve a portion of a person's income for use after retirement. Following a term of employment, life insurance companies offer pension plans as retirement funds.
Retirement planning shouldn’t be wavered off as a later concern. Pension plans require timely attention. Decisions regarding pension schemes should be based on data and extensive research. Therefore, here’s a list of pension schemes in India to know the best schemes to channel your investment.
Unit Linked Insurance Plans (ULIP):
ULIP is a greatly preferred pension scheme in India because of their transparency in investment. It also provides a dual benefit of insurance and investment to the investors. Unit Linked Insurance Plans entail insurance and investment.
ULIP provides a death benefit, the sum that will be paid to the nominee if the policyholder passes away given unfortunate circumstances while the ULIP is still in effect. Moreover, investments in unit-linked insurance plans are tax-deductible.
Indira Gandhi National Old Age Pension Scheme (IGNOAPS):
Among the best few pension schemes in India, this scheme focuses majorly on providing social security to senior citizens through assured income. It provides pensions for disabled people, widows, and senior citizens.
The applicants should belong to low-income groups or BPL. They must be 60 years or older. This program is a non-contribution government pension plan and the recipient is not required to make any payments to earn a pension.
Atal Pension Yojana (APY):
This scheme in India is open and suitable for workers belonging to the lower income class. APY aims to provide lower working-class citizens with a chance at planning their life after retirement. The contributor needs to make monthly contributions for a minimum of 20 years. The Central Government co-contributes 50% of each contribution made to the pension fund or Rs. 1, 000 annually, for a minimum of five years.
National Pension Scheme (NPS):
NPS is among the best pension schemes in India. The Pension Fund Regulatory and Development Authority of India monitors transparency in investment norms. It provides a 9%-12% interest rate to the investor. NPS permits the investor to make emergency withdrawals, up to 25% of the total amount of savings made, up to 3 times in five years.
Varishtha Pension Bima Yojana (VPBY):
VPBY provides both a guaranteed rate of return and income security. It offers immediate annuity plans that offer a regular pension to the beneficiary. Among the several advantages of this plan is the fact that it has no maximum age limit.
Under this plan, the beneficiary has the option to choose a monthly, quarterly, half-yearly, or annual pension. It provides a guaranteed pension based on a 10-year period with an annual rate of return of 8%. Tax is exempted from the premiums paid for this policy. In case of the demise of the beneficiary, the amount is transferred to the nominee.
What is PPF?
Public Provident Fund (PPF) is a savings-cum-investment scheme among some top preferred pension schemes in India. It was launched in 1968 by the Finance Ministry’s National Savings Institute with the vision to generate long-term financial stability and wealth for investors. It has a tenure of 15 years, which can also be extended.
It’s highly recommended that you use a PPF interest calculator to calculate the amount you will be accumulating. It is a viable option for calculating tax savings and maturity value on one’s investment.
PPF interest calculator is a user-friendly tool designed to easily and efficiently calculate interest returns. It works on the above-mentioned mathematical formula. Follow the steps mentioned below to use an online PPF interest calculator-
Step 1: Search on Google for a PPF interest calculator and visit a website of your liking.
Step 2: Enter the preferred annual investment amount and set the tenure if desired.
Step 3: The maturity value of your initial investment will be displayed on your screen.
Final Thoughts:
Choose wisely and strategically from the best pension schemes in India. Manage your wealth as you would manage your health.