Question

Your uncle wants to invest some money in any saving scheme. Name any two schemes which could help him. Write two benefits and two drawbacks of these schemes.

Answer 1

Saving schemes are modes of investment which may help an individual or family in time of needs. The two saving schemes are 

• PPF In this saving scheme some nationalised banks and post-offices offer people to deposit money from 1000/- to 1,50,000/- in a financial year. The money can be deposited either in lumpsum or in convenient installments.
• Benefits of PPF schemes are
• The investment are safe and secure.
• Interest is exempted from tax.
• Drawbacks of this Scheme are
• Duration is long
• Can’t invest more then 1,50,000/- per annum. Another saving scheme is whole life insurance where insurer is insured for his entire life. A specified premium has to be paid either quarterly or half yearly or annually.
• Benefits of this scheme are
• Safe method. 
• Can really help in case of untimely death of an insurer.
• Drawbacks of this scheme are
• It is a long term policy.
• There is no liquidity