The ongoing coronavirus crisis which has spread its wings worldwide has diminished the investor's confidence in the markets and most of the people are focusing towards investing in a safer form of investments which provides a guaranteed-returns.
The current scenario has forced many central banks globally to trim down the interest rates on most of the deposits leaving the customer little to do with their hard-earned money.
The diving interest rates have posed a new challenge for the investor community especially the middle class and the senior citizens who mainly rely on the traditional form of investments like fixed deposit, savings deposit and park their money.
The prevailing lower interest rates are here to stay till there is a positive growth of the economy which has been badly bruised by the pandemic.
Amidst such a scenario let's explore the Best Fixed Income Schemes to Invest Amidst Coronavirus Crisis.
RBI’s Floating Rate Savings Bond 2020 (Taxable) Scheme
This scheme which is rolled out by the Reserve Bank of India offers an attractive rate of interest at 7.15 per cent and is launched from July 1, 2020.
Key Takeaways from RBI's Floating Rate Savings Bond 2020 (Taxable) Scheme
• The interest rate on the scheme will be revised every six months.
• These bonds can be purchased only by resident Indians. NRI's are not eligible to purchase the bonds.
• The interest rate on these bonds will be 35 basis points over and above the National Saving Certificate.
• No cap on investments.
• Lock-in period for these bonds stands at 7 years. But the exemption is there for senior citizens in specific cases.
• These bonds are taxable under the Income Tax Act of 1961.
• Bonds can be purchased from designated bank branches in dematerialized form.
Kisan Vikas Patra
The Kisan Vikas Patra or KVP offered by the India Post is one of the popular forms of investment bet amidst falling interest rates. This investment plan offers an interest rate of 6.9 per cent per annum and is subject to change periodically as per the directions from the Finance Ministry.
Key Takeaways from Kisan Vikas Patra
• This government-backed investment scheme offers guaranteed returns to investors.
• Get capital protection irrespective of the volatile market situation as the investment is not tied up to markets risk.
• Investor can invest in any denominations of Rs 1,000, Rs 5,000, Rs 10,000, Rs 50,000.
• No maximum cap on the investment made towards the scheme.
• Certificate can be transferred from one person to another.
• Returns from Kisan Vikas Patra are completely taxable under the Income Tax Act. But TDS is exempt from withdrawals if it is withdrawn on completion of maturity period.
• Lock-in period is 30 months but premature withdrawal facility is available.
National Savings Certificate VIII Issue
The National Savings Certificate VIII Issue offered by Post Offices comes up with an interest rate of 6.8 per cent. This saving scheme can be purchased at any of the post offices in India.
Key Takeaways from National Savings Certificate VIII Issue
• Minimum deposit towards the scheme is Rs 100.
• No maximum limit on the deposit.
• Government-backed scheme and hence comes with guaranteed returns.
• The certificate will be issued on a passbook or through exclusive e-mode.
• Rate of interest will be revised every quarter and will be computed on a half-yearly compounded basis.
• Deposits made towards this scheme is eligible for tax rebate under Section 80C of the Income Tax Act.