You might have read enough about why debt investment option plays a good role in your investment portfolio. Most of the time people are confused with the term debt investment. Is it something different than our normal investment options in India? Frankly speaking, most of the popular investment tools are belong to them only. In this article I will talk about VPF or voluntary provident fund that many of us are using to fulfill our long term investment goal. Why VPF is the best way to invest in debt 2016, Let’s find out the same.
Most Popular Debt Investment tools in India 2016
Generally bank FDs, income tax saving fixed deposit schemes, bonds are the best way to invest in debt. In-fact these are common terms people used to invest or personal finance planner suggests. But this year 2016, VPF is going to play a different role compared to previous years.
We all know that EPF or Provident Fund is one of the most trusted & secure way of long term investment. In fact due to the income tax exemption on return this is the best debt instrument. Every employee can invest a certain amount of money as per the rule in PF. But if you still want to put more money in your EPF account, then also there is another option called VPF or voluntary provident fund.
Why VPF is best compared to FDs & Bonds in 2016
As per the speculation, EPFO is going to raise the interest rate for EPF balance from current rate of 8.75% to 8.95%. This is yet to be declared, but if that is going to hit the reality then in the coming financial year EPF will give you the maximum return on your EPF balance compared to previous years. Not only that, if you consider the income tax or TDS factor in calculation, you will find that VPF will give you the best return compared to bank FDs & Bonds in 2016.
Anyway, this is a speculation only. You have to wait till the news arrive. But VPF is actually a very good way to invest in debt investment instrument for long term if you have a plan to put your money for more than 15 years. I know many of my friends prefer to the put the money in VPF rather buying bank FDs or bonds frequently.
The EPF withdrawal procedure has been simplified over the period of time and this has really changed the perception of people towards PF. If you have activated your UAN, then you are done with every formality and continue without any hassle regarding EPF account maintenance, balance inquiry and future withdrawal as per new EPF rules.