Top 6 investment options for women in India

In India, an increasing number of women are entering the workforce and opting for financial autonomy. While they are motivated by aspirations for successful careers, they must recognize that financial security is as vital as independence. Prioritizing investments is essential as it provides the means to achieve various goals such as marriage, funding children's education, purchasing a home, and more.

Here are some of the top investment options for women in India.

• PPF or Public Provident Fund

PPF is among the select few investment products that benefit from the triple tax exemption, often known as the exempt-exempt-exempt (EEE) classification. This means that tax exemptions are granted at the time of investment, accrual, and withdrawal.


Also read: Why the Public Provident Fund is a safe option to save tax; 5 things to know

Under section 80C of the Income-tax Act, 1961, investments made during each financial year are eligible for a deduction of up to Rs 1.5 lakh. Tax exemption also applies to interest generated annually. Thirdly, you receive tax-free income when you remove the accumulated corpus upon maturity because it is likewise free from taxes.

Interest at 7.1 percent (for the January-March 2024 quarter) per year will be paid on the lowest balance at the credit of an account between the closing of the fifth day and the end of the month. At the end of each year, interest is credited to the account. Note that interest is credited at the end of the year, regardless of whether the account office changes owing to a transfer of the account during the year.

• Mutual funds via SIP

Investments in mutual funds can be done in two ways: lump sum and Systematic Investment Plan (SIP). With SIP, investors can make monthly contributions, sometimes as low as Rs. 500, into their chosen mutual funds. Unlike the lump sum option, SIP allows investors to make regular deposits monthly or quarterly over a defined period, potentially leading to greater returns in the future. This method aids in diversifying the investor's portfolio, as they can opt for multiple SIPs compared to the lump sum approach. Whether one has a low or medium risk tolerance, mutual fund investments cater to women investors of all types.

• National Pension System (NPS)

Many individuals opt for the National Pension System (NPS) as a means to secure their retirement savings. An additional advantage of NPS lies in its provision of tax benefits, applicable in both the old and new tax regimes. In the old tax regime, NPS offers tax advantages under three sections of the Income Tax Act, 1961. With two types of NPS accounts available, Tier-I and Tier-II, this scheme is deemed suitable for women looking to save for their future. The National Pension System (NPS) is a market-linked savings initiative introduced by the Indian Government to aid individuals in accumulating funds for retirement. Within the NPS framework, an individual's savings are invested in a diversified portfolio comprising Equity, Government Bonds, Liquid Funds, Corporate Bonds, and Fixed Income Instruments.

Also read: NPS investment can save you tax on income up to Rs 9.5 lakh under old, new tax regime: Here's how

• Fixed Deposit (FDs)

Fixed deposits represent another secure investment avenue for women. Offered by numerous banks and financial institutions, they provide a reliable option with high interest rates, which may differ among institutions. With minimal risk associated, fixed deposits present themselves as a viable investment choice, promising decent and guaranteed returns in the future.

• National Savings Certificate (NSC)

The minimum investment to be done is Rs. 1000 and there is no maximum limit. Any number of accounts can be opened under the scheme. The deposit shall mature on completion of five years from the date of the deposit. Deposits qualify for deduction under section 80C of Income Tax Act. NSC interest rate was not hiked for this January- March 2024 quarter. The rate is unchanged at 7.7% compounded annually but payable at maturity. The deposit will mature after five years from the date of deposit.

Also read: Was National Savings Certificate interest rate hiked for January- March 2024 quarter?

• Mahila Samman Savings Certificate

Mahila Samman Savings Certificate, a small savings scheme specially for female investors, was introduced during Budget 2023. It is a one-time scheme available for two years, from April 2023-March 2025. It can be used for investments by a woman for herself or by the guardian on behalf of a minor girl. This scheme's deposits earn an annual interest rate of 7.5% per annum. This interest rate is not revised for this quarter and is kept unchanged. Interest shall be compounded on quarterly basis and credited to the account. The interest will be compounded quarterly and credited to your account. The investment made under the plan is not eligible for a tax saving benefit under Section 80C of the Income-tax Act, 1961. Interest earned under the plan is taxed. This implies that, unlike tax-saving fixed deposits, you will not receive any tax advantages. Mahila Samman Savings Certificate interest income is not exempt from tax. TDS will be deducted depending on the total interest income and individual tax slabs. The deposit will mature after two years.