How much do you know about your EPS and PF?

The current PF system takes out 14 lacs of your wealth. 

1. 12% of your basic salary is contrubuted (or rather forcefully taken away) towards Provident fund.
2. This PF is divided into 3 parts. Employee's contribution towards PF, Employer's contribution towards PF and Employer's contribution towards EPS
3. For example, if your basic salary is 16000, your contribution will be 1926, 676 and 1250 in the above order.
4. While PF earns you 8.5% interest every year, EPS (Employees' Pension Scheme) does not give you any interest. Yes. NO INTEREST. You have to keep paying this constant amount every month and cannot withdraw before you turn 50. If you work for 30 years, your total contribution will be 4,50,000
Lets say you work in an industry for 30 years and you contribute this amount towards an RD (Recurring deposit). You will be realising an amount of 18 Lacs (1855381. I calculated with 8% interest). Yes. You can make more on your own
Do anybody know then why the hell we have to pay this? 
Also, the pension that you are entitled will not be more than 6.5k per month as well. Imagine how much u ll be getting on a bank FD for 18 lakhs.
Verdict: It is a safe contribution but one with sound financial knowledge can make much more with that amount

LIC - Good option??

Having an LIC policy is good but the policy holder needs to pick the right policy.

An LIC policy covers the following

1. Life cover
2. Tax savings
3. ROI - Return on Investment


It looks lucrative when an agent explains it but if you are prefering it as an investment option, then you are definitely at loss.

A conventional policy roughly gives you 7% return at the max, which is less that bank FD/RD/PPF/NSC. Its the least you get.

So going for it as a pure investment option ruins your money as your money does not grow (calculate with 7% inflation)

Yes it is a tax saving option but even your PPF is a good tax saver with higher interest rate.

A term insurance is a good option if you need more life cover at a cheaper rate. And again, dont count a term insurance as an invest option. It is just like your medical and bike insurance. You will not get that amount back when you are well and good. You need to renew it every year

Finally, its upto you to decide on what you need. If you think insurance to be a complete package, go for it. But do your math right and confirm that it is a good one.

Questions/Clarifications are welcome!!