Investment Advice for Indian Defence Personnel

Summarised below are the short-term and long-term financial investment options available for Indian investors.

Short-term Investing

  • Savings Bank Account. Often the first banking product people use, savings accounts offer low interest (generally 4-6% p.a. in India presently), making them only marginally better than safe deposit lockers. In case a large amount keeps lying in the account, apart from losing the opportunity cost of investment in better products, the interest is also taxable as per the Income Tax laws.
Use only for short-term (less than 30 days) surpluses
  • Money Market Funds (also known as liquid funds). Money market funds are a specialized form of mutual funds that invest in extremely short-term fixed-income instruments. Unlike most mutual funds, money market funds are primarily oriented towards protecting your capital and then, aim to maximize returns. Money market funds usually yield better returns than savings accounts, but lower than bank fixed deposits.
Offer better returns than savings account without compromising liquidity
  • Bank Fixed Deposit (Bank FDs). Also referred to as term deposits, this product is offered by all banks. The minimum investment period for bank FDs is usually 30 days. The ideal investment time for bank FDs is 6 to 12 months as normally interest on banks less than 6 months bank FDs is likely to be lower than money market fund returns. While engaging in this particular investment, meticulous planning of your investment time frame is crucial, as premature withdrawals typically entail penalties. Additionally, it is imperative to bear in mind the tax implications, which can significantly reduce a substantial portion of your interest earnings.

For investors with low risk appetite, best for 6-12 months investment period provided it is tax-efficient for you

Long-term Investing

  • Post Office Savings Schemes (POSS).
  1. POSS are popular because they generally yield a higher return than bank FDs.
  2. The monthly income plan could suit you if you are a retired individual or have regular income needs.
  3. Besides the low (Government Guarantee) risk, the fact that there is no tax deducted at source unless the interest is over and above the prescribed limit for different taxpayers.
  4. The Post Office offers various schemes that include National Savings Certificates (NSC), National Savings Schemes (NSS), Monthly Income Schemes, and Recurring Deposit Schemes. However, tax on the interest earned should also be considered while investing in POSS.
  5. Low risk and no TDS but keep in mind the tax-angle.

Interest rates (New)

SI.No. Instruments Rate of interest w.e.f 01.04.2023 to 30.06.2023 Compounding Frequency
01 Post Office Savings Account 4.0 Annually
02 1 Year Time Deposit 6.8 (Annual Interest 698 for 10,000/-) Quarterly
03 2 Year Time Deposit 6.9 (Annual Interest 708 for 10,000/-) Quarterly
04 3 Year Time Deposit 7.0 (Annual Interest 719 for 10,000/-) Quarterly
05 5 Year Time Deposit 7.5 (Annual Interest 771 for 10,000/-) Quarterly
06 5 Year Recurring Deposit Scheme 6.2 (Maturity Value 27,043 for 100/- Dn) (After Extension with Deposits 6 Years-28,731 7 Years 10,526 8 Years-12.435-9 Years-14.465/- & 10 Years-16,623/-) Quarterly
07 Senior Citizen Savings Scheme 8.2 (Quarterly Interest 205 for 10,000/-) Quarterly and Paid
08 Monthly Income Account 7.4 (Monthly Interest 62 for 10,000/-) Monthly and paid
09 National Savings Certificate (Vill Issue) 7.7 (Maturity Value 14.490 for 10,000/-) Annually
10 Public Provident Fund Scheme 7.1 Annually
11 Kisan Vikas Patra 7.5 (will mature in 115 months) Annually
12 Mahila Samman Savings Certificate 75 (Maturity Value 11,602 for 10,000) Quarterly
13 Sukanya Samriddhi Account Scheme 8.0 Annually

Here is the summary of the current post office schemes and interest rates.

Low risk

risk attached is Government risk.


Under Income Tax section 80C to the full extent of Rs 1.5 lakh.

Fairly good returns

Linked to Government 10-year securities, rate fixed in April every financial year.

Public Provident Fund (PPF). PPF is a very attractive fixed-income investment option for small investors primarily because of the:-

  • Low risk –The risk attached is Government risk.
  • Tax-rebate –Under Income Tax section 80C to the full extent of Rs lakh.
  • Fairly good returns –Linked to Government 10-year securities, rate fixed in April every financial year.

So, what’s the catch? Lack of liquidity is a big negative. You can withdraw your investment made only after 7 years (although there are some loan options that begin earlier). If you are willing to live with poor liquidity, you should invest as much as you can in this scheme before looking for other fixed-income investment options. However, first look at your organization’s Provident Fund scheme (like EPF, DSOPF etc) which might offer better features and/or returns.

Best fixed-income investment for high tax payers

  • Company Fixed Deposits (FDs). Fixed Deposits (FDs) serve as financial instruments employed by corporations to raise funds from individual investors on a smaller scale. Typically FDs are open throughout the year. Invest in FDs only if you have surplus funds for more than 12 months. Select your investment period carefully as most FDs are not cashable prior to their maturity. Similar to various other financial instruments, Fixed Deposits (FDs) inherently encompass an element of risk, which becomes even more pronounced due to the absence of a mandatory credit rating requirement for non-financial entities offering these investments. Investors should consciously (either through a credit rating or through an expert) select the companies they invest in. Quite a few small investors have lost their life savings by investing in FDs issued by companies that have run into financial problems.

Maximize returns within a fixed-income portfolio

  • Bonds and Debentures. In addition to company Fixed Deposits (FDs), corporations also issue bonds and debentures as alternative fixed-income instruments. However, due to a relatively illiquid secondary market and a lackluster primary market, investments in these instruments are predominantly biased toward offerings from financial institutions. While you might find some high-yielding options in the secondary market, if you do not want the problems associated with bad deliveries and the transfer process or you want to invest a large sum of money, the primary market is the better option.

Large investments or to avail of some capital gains tax rebates

Mutual Funds. Have you ever engaged in a collaborative investment venture with another individual? Well, mutual funds work more or less on the same principle. Investors pool together their money to buy stocks, bonds, or any other investments. Investing through mutual funds allows an investor to:-

  • Avail the services of a professional money manager (who manages the mutual fund) at a very low cost.
  • Access a diversified portfolio despite making a limited investment.
  • Have the flexibility of quantum, timing, flexibility and variety of investments as also withdrawals.

Unless you know stock markets well, use mutual funds as a vehicle to invest

Life Insurance Policies.

Life insurance premiums, depending upon the policy selected, include the costs of:-

  • Death-benefit coverage.
  • Built-in investment returns.
  • Significant overheads, including commissions.

This implies that if you buy insurance solely as an investment, you are incurring costs that you would not incur in alternate investment options. It is, however, important to insure your life if your financial needs and profile so require.

Don’t buy life insurance as an investment. Preferably buy a Term Plan for Insurance and Mutual Funds and other instruments for investment

Equity Mutual Funds / Shares. A Long-Term Wealth Growth Path for Investors

Investing in equities, also known as stocks or shares, can be a powerful tool for individuals seeking to build wealth over the long term. While it comes with its fair share of risks, equities have historically offered attractive returns, outperforming other asset classes like bonds and cash. This article aims to provide an overview of equity investments, their benefits, and some essential considerations for individuals looking to venture into the stock market.

  1. Understanding Equities:

Equities represent ownership in companies. Investing in equities means becoming a shareholder, which can lead to capital gains as the company grows and prospers.

  1. Long-Term Growth Potential:

Equities have a strong long-term growth potential. Successful companies increase earnings, expand, and deliver returns to shareholders, making equities attractive for those with a long-term perspective.

  1. Diversification and Risk Management:

Diversification is key in equity investing. Spreading investments across companies, sectors, and geographies helps reduce the risk associated with individual stocks.

  1. Research and Due Diligence:

Thorough research is essential before investing in equities. Analyzing financial health, growth prospects, and management teams helps make informed investment decisions.

  1. Time in the Market vs. Timing the Market:

Rather than trying to time the market, focusing on long-term investment horizons is often more beneficial. Staying invested in quality companies allows for compounding and helps ride out market volatility.

  1. Risk Considerations:

Equity investing comes with risks, including the potential for loss. Stock prices are volatile, influenced by economic conditions, company news, and global events. Assessing risk tolerance is crucial.

  1. Professional Guidance:

Seeking guidance from a financial advisor can provide valuable expertise. Advisors assist with investment planning, risk assessment, and ongoing portfolio management.


Investing in equities can lead to long-term wealth growth. Thorough research, diversification, and a focus on the long term are crucial. While risks exist, with proper knowledge and guidance, equities can be a powerful tool in achieving financial success.

Following are the two ways in which you can invest in equities:-

  • Through the secondary market (by buying shares that are listed on the stock exchanges).
  • Through the primary market (by applying for shares that are offered to the public).

Historically, equity shares have proven to yield the highest returns for investors over extended periods. However, this investment option is also widely acknowledged to carry a considerable level of risk. Therefore, it is advisable to allocate funds to equity shares only if you can afford to invest for a minimum of three years without requiring the capital.

death-benefit coverage.

built-in investment returns.

significant overheads, including commissions.


Savings Bank Account

Use only for short-term (less than 30 days) surpluses

Money Market Funds

Offer better returns than savings account without compromising liquidity

Bank Fixed Deposits

For investors with low risk appetite, best for 6-12 months investment period

    1. Savings bank account – Use only for short-term (less than 30 days) surpluses
    2. Liquid/Money market funds – offer better returns than savings accounts without compromising liquidity (Use for 3-6 months requirements)
    3. Bank fixed deposits are an ideal choice for investors who possess a low-risk tolerance and seek a secure option, particularly suitable for a short-term investment horizon ranging from 6 to 12 months.
    4. Post Office savings – Safe Investment Avenues as it’s backed by Central Govt and right now schemes are offering very lucrative interest rates.
    5. Public Provident Fund – Best fixed-income investment for high taxpayers as it comes under the EEE category (Section 80C allows a deduction for the principal sum expended up to Rs. 1.5 lakh. The interest gained as well as the maturity value is also tax-free)
    6. Company fixed deposits – Option to maximize returns within a fixed-income portfolio, rates are generally higher than bank FDs but at the same time carries more risk than Bank FDs
    7. Bonds and debentures – Option for large investments or to avail of some capital gains tax rebates, generally risker than other debt investment avenues.
    8. Mutual Funds – Unless you are very confident of your stock market investment skills, use mutual funds as a vehicle to ride, have investment horizon of at least 3 years
    • Equity shares – Maximum returns over the long-term, invest funds you do not need for at least three years and generally if held over 5 years equities have given much better returns than other regulated asset classes.
    • Debt Mutual Funds – Provides Safety and stability in the portfolio in uncertain and volatile equity markets and offer better returns than Bank FDs along with liquidity to cater any short term requirements and right now as interest rates are at peak, so it’s the best time to invest in debt funds.
    1. Life Insurance Policies – Don’t buy life insurance solely as an investment, as the objective of insurance should be risk mitigation and not wealth accumulation. Insurance and Investments both are two different things, so generally it is advisable to buy a term insurance and health insurance only, however, it depends on case to case and person to person.


GIVING (Charity)

What is the appropriate behavior when we are accosted by hungry eyes and outstretched grubby palms at traffic signals every day? Should we toss some coins and quell the guilt, shoo them away and turn up the music or ignore them and wait for the light to change because we can’t be responsible for every poor in the country? The answer, we know, is none of the above. As we roll up the window and wave the odour away, it is perhaps time to look at how we can help.

In a world where the wealthy are amassing more wealth while the underprivileged face increasing hardship, the significance of charitable giving has never been more critical or accessible. While writing a check to support your favored cause is one means of giving back, it certainly isn’t the sole option. Moreover, giving doesn’t always have to revolve around financial contributions; you can also make a difference by dedicating your time, leveraging your professional expertise, or supporting causes that align with your personal passions. In fact, even a good workout (charity marathons!) could end up helping a cause.


If contributing financially through writing a check doesn’t resonate with your concept of giving, devoting just two hours per week could be the perfect avenue to support a cause. Volunteering encompasses a diverse range of activities, such as educating children, utilizing your skills to assist a disadvantaged NGO, participating in or organizing events like fairs or awareness programs, and much more, or helping out at a picnic for underprivileged children. All these are fun options to give. If you have only weekends to spare, you can participate in some short-term activity like volunteering for a Thalassemia awareness programme or helping organize a sports meet for underprivileged children. All you have to do to start volunteering is email an organisation that will assess your areas of interest after meeting you. It will then assign you to an organisation and a task after a short sensitisation training session.

Online Giving

Social fulfillment at the click of a button can’t get easier than this. There are several social organizations founded by non-resident Indians that work in areas such as education, healthcare, and providing basic amenities in India. Most of these allow you to donate online. A simple Google search will throw up plenty of options to choose from. ‘Give India’, for example, has its own online donation section on its website You can access the site, go through the names of NGOs listed, and donate money online to any of these. Another site,, also has an online donation section called click2donate. Donations to, say World Vision, through your credit card on a monthly basis, after giving the instructions once to your credit card company, is another easy way to earn your plus points with God. You can make various other kinds of donations, as well. For example, at, you can donate shares or even a computer. Donations can be made once, monthly, or yearly, through the Internet, by post, or by money transfer. Most online donations are also eligible for tax exemptions under Section 80G. Don’t forget to check the website and the NGO benefiting from your donation for authenticity before making the payment. And then, just click!

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