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I am 24 years old. I am in the 30 per cent tax bracket. Please advice a tax saving plan for me. Should I invest in LIC's New Jeevan Anand or Equity Linked Savings Scheme (ELSS) or Public Provident Fund (PPF)?
- Prabhakaran
You haven't shared your investment profile. So we are offering you some general observations about your choices.
Your first choice (New Jeevan Anand) is an insurance plan with savings/investment elements in it. Such plans neither offer a large insurance cover or great returns. That is why we do not recommend them. We only recommend pure term insurance plans for buying a life insurance cover. If you have financial dependents, you should buy an adequate life cover. But always opt for an online term insurance plan.
Equity Linked Savings Scheme (ELSS) or tax planning mutual funds invest in stocks. Because of this, they are suitable only for investors with a higher risk appetite. However, they have the potential to offer superior returns over a long period because of their investments in equity. They have a lock-in period of three years, but you should invest in them only if you have an investment horizon of five years or more.
Public Provident Fund (PPF) is a government-backed plan that offers assured returns. It has a tenure of 15 years and it is ideal for extremely conservative investors looking to invest money for long-term goals.
Depending on your investment horizon and risk profile, you can choose between ELSS and PPF.
This article was originally published on January 06, 2016.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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