NPS v/s Other Tax Saving Investments – Where A Tax Saver Should Invest?

Saving enough money till retirement is among the primary goals of an investor. Investing in instruments that make you eligible for tax benefits is another way of ensuring high returns. On investing in NPS, you can claim deductions of up to Rs. 1,50,000 as per section 80C of the IT act. Also, you are eligible for an extra Rs. 50,000 as per Section 80CCD (1B). Here are other tax-saving instruments that you can think of investing in:


Equity-Linked Savings Scheme is also known as a tax-saving mutual fund. It offers a tax deduction of Rs. 1,50,000 according to the section 80C. However, the funds you invest in ELSS are entirely allocated to equities whereas NPS allows you to select the percentage of the equities that can be up to 75%. Therefore, ELSS is a slightly risky instrument if you compare it with NPS. 


Apart from saving Rs. 1,50,000 every year on taxes, PPF exempts you from paying taxes on investment, interest gains, and withdrawals. It is because it has gained EEE status. However, the pension that you will earn from NPS after retirement is taxable. 

Tax Saving Deposits 

Tax-saving FDs also offer a deduction of Rs. 1.5 lakhs in a financial year but TDS applies if the interest earnings cross Rs. 40,000 (Rs. 50,000) in case of senior citizens. Also, withdrawing the deposits before maturity is not possible. 

As both tax-saving deposits and NPS do not offer flexibility in terms of liquidity, investing in senior citizen FDs can be a good option. It is because financiers may offer a higher rate of interest on these FDs. With Bajaj Finance FD you get an excess FD rate of 0.25 if you are a senior citizen. Also, as its interest rates are already high, you can manage to earn enough returns post-retirement. Some of the essential features of this FD scheme are discussed below: 

Easy investment alternative 

With an interest rate of up to 6.75%, Bajaj Finance FD proves to be the best fixed deposit scheme for senior citizen. Also, investing easily via the online FD form is possible now. Even document verification and payment processes are now online. Therefore, involving yourself in the investment procedures and formalities by visiting the branch office is no longer a necessity. 

As a non-senior citizen, you may earn a 0.10% excess FD interest rate on choosing the online investment method. 

Loan against FDs 

Collateral-free loans are offered by Bajaj Finance FD if you need emergency funds. These loans don’t need any collateral and they save you from breaking your deposits prematurely. This along with the multiple frequencies of interest payouts such as monthly, quarterly, yearly, and six-monthly options assists you while managing funds post-retirement. 

However, you may also liquidate your investment early if you have left with no other option. For that, your deposit needs to complete at least 3 months from the investment date. 

Ladder FDs 

Ladder fixed deposits to save your deposits from fluctuating interest rates. Bajaj Finance Fixed Deposit offers a multi-deposit feature to facilitate easy withdrawal of the deposits. Selecting multiple FD tenors and FD types along with a unique deposit amount for each deposit is possible through this facility. The FD calculator offered on its site will help you make well-informed decision related to choice of tenor, FD type, and deposit amount.

Make the payment for all the deposits through a single cheque and ladder FDs for ensuring high liquidity for your deposits! 

The safety of your deposits can be confirmed from the high credit ratings that credit rating organizations like ICRA and CRISIL have provided to Bajaj Finance FD. 

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