Sukanya Samriddhi Yojana – Good return (currently – 8.4%) and highly tax efficient (No tax on Interest) – Invest for your girl child future.
PPF – Good return (currently – 7.9%) and highly tax efficient (No tax on Interest) – I will first invest in PPF before investing anywhere else. Invest only the funds which you don’t need before 15 years.
Equity Mutual Fund – Very good return and highly tax efficient (15% tax if sold within a year and 10% tax (only on capital gains more than 1 lac) if sold after one year) – Invest in the Large Caps as per the market situation – avoid when valuation multiples are high and invest when they are low. Invest only the funds which you don’t need before 3-5 years
NPS – Very good return and most tax efficient (effectively zero tax) – Invest in NPS before investing in Equity or Debt Mutual Fund. Invest only the amount which you don’t need before retirement.
Gold Bond – good return and tax efficient (interest income taxable but not tax on capital gains at the time of redemption) – better buy gold bond than investing in physical gold. Gold Bonds currently give 2.5% interest + appreciation.
Shares – good returns and highly tax efficient (15% tax if sold within a year and 10% tax (only on capital gain more than 1 lac) if sold after one year.