“Sir, you invest Rs. 1 lakh per year for 10 years and after 20 years, you will get Rs. 20 lakhs guaranteed, tax free.”
Isn’t this going to get your mouth watering?
Well, the absolute number of Rs. 20 lakhs is quite a big number, that too guaranteed and tax free.
It is big enough to get you thinking and consider the investment. However, like a good investor, you would search for options.
What’s the alternative?
Let’s consider the Bank Fixed Deposit. A Bank FD is one of the safest investments with guaranteed returns.
If you invest the same Rs. 1 lakh every year for 10 years in a Bank Fixed Deposit at a 7 % rate of interest, what would you get?
The answer is Rs. 29.08 lakhs. But, the interest is taxable as per your tax bracket.