1. DSOPF DSOPF has been and continues to be the most common method of savings for most Armed Forces employees. It is most easy to start /change/ increase/decrease/withdraw. We are all supposed to compulsorily save a portion of our pay in DSOPF. There were times about a little more than a decade back when DSOPF(or rather Post office savings, FD’s etc) would give returns of about 10-12%. But as on 2022 it is about 7-7.5%( Could be a little higher or lower. Interest rates change based on demand and supply.
So when there is more money and less people taking loans the interest rates go down to encourage more loans and vice a versa). Since it is the easiest thing to invest in so most of the people invest quite a portion of their salaries in it. I have seen some people invest about a lakh per month in DSOP as well. The returns in DSOP are exempted from tax up to for up to a max contribution of 5 laks per year as on 2022. If you are saving more than 5 laks a year( more than 42k/ month) then the interest on the excess portion will get added to your income and you will have to pay tax accordingly. This makes saving more than 42k/month in PF unattractive. But up to that limit it still a better option than Fixed Deposit which are taxed as per bracket. DSOPF its very convenient to subscribe and the tax exemptions under 80 C are automatically adjusted in the pay slips. Back in the days when interest rates were higher, it was one of the best investment options.
2. PPF PPF is very similar to PF. It is a central government scheme. The interest rates are close to 7% as on 2022. The max amount that can be invested is 1.5 lakh per year which is 12.5 k/month. PPF investment is exempted under 80 C. Also the returns on PPF are exempted from Tax. The only drawback is the limitation of 1.5 lakh per year. Investments made to a PPF account have a lock-in period of 15 years. However, individuals can make a partial withdrawal from the PPF account after 5 years from the date of opening the account. Some people earn more so they would like to invest more so the 1.5 lakh limit puts limitation.
