Ram can invest his monthly saving in:
(a)Public Provident Fund (PPF): Under it an account holder is required to deposit every year an amount ranging between ? 500 to ? 1 lakh in his account for a period up to 15 years Interest is credited every year at the prescribed rate. Amount deposited every year in this account is subject to tax exemption.
(b)National Saving Certificate : Ram can buy NSC for any amount (100 x more). The principal amount alongwith accmulated interest is paid on maturity (after 5 or ten years). Funds invested in NSC subject to an overall limit of 1 lakh are eligible for tax benefits.