There are several different types of retirement savings and investment plans available in India, each with its own unique features and benefits. Here is a brief overview of some of the most common types:
- Provident Fund (PF): This is a retirement savings plan that is typically offered by employers and is mandatory for certain types of workers. Contributions to a PF account are made by both the employee and the employer, and the funds are managed by a government-run organization called the Employees’ Provident Fund Organization (EPFO).
- Public Provident Fund (PPF): This is a government-backed retirement savings plan that is open to all individuals. Contributions to a PPF account are made by the individual, and the funds are managed by the government.
- Employee Provident Fund (EPF): This is similar to a PF, but is only for certain types of workers, such as those in the organized sector. EPF is managed by EPFO.
- General Provident Fund (GPF): This is a retirement savings plan for government employees. GPF is managed by the government.
- Voluntary Provident Fund (VPF): This is a retirement savings plan that is similar to a PF, but is open to individuals who want to make additional contributions beyond the mandatory contributions required by their employer.
- National Pension System (NPS): NPS is a pension scheme launched by the government of India which allows individuals to make contributions to their retirement savings. It is open to all citizens of India.
- Old Pension Scheme: Old Pension Scheme, also known as defined benefit pension scheme, where the pension amount is fixed and is not linked to the contributions.
- Gratuity: Gratuity is a retirement benefit that is typically offered by employers to their employees. It is a lump sum payment that is based on the employee’s length of service and salary. It is generally paid after an employee completes a certain number of years of service with an organization.
All these schemes have different features, benefits and suitability based on an individual’s needs and financial goals. It’s important to consult with a financial advisor or a professional to understand which scheme fits best for you.