Today there are a number of options available to you, when it comes to investing your money. At times, it can get really confusing as to which one is the right one for you and meets all your requirements. But rather than being confused about it, I would advise you to gather some knowledge about each one of these investment avenues, take a smart decision and use the right vehicle for investing your hard-earned money. Here are some of them, that I would like to share with you.
- Saving Account: This should be used for savings only for a small interval. The rate of interest on these savings is somewhat less, when compared to other options, but the good thing is, you have a no-questions-asked-withdrawal option !!
- Fixed Deposit: It is better to invest money in it for 6-18 months and gives better returns than Saving Accounts.The main problem with Fixed Deposit is its predefined fixed time interval. If you happen to withdraw your money, before the actual completion of deposit-term, you will have to pay some penalty charges. So it’s better to be sure of time interval, you want your deposit to be locked in for, before actually investing the money.
- Post Office Savings Account: This option is especially suitable for those, who are living in rural and semi-urban areas, with a very limited access to banks. There is no lock-in or maturity period. One can just walk into a post office, meet the clerk, fill the form, complete the formalities and get the account opened. It usually gives more return than FD.
- Public Provident Fund: This investment avenue has been established by the central government. You can voluntarily decide to open a PPF Account. You need not be a salaried individual in order to open a PPF Account. You could be a consultant, a freelancer or even working on a contract basis, you can also open this account if you are not earning. The returns on PPF Accounts is decided by government and is usually in single-digits.
- Stock Market: This is the option which has the potential to give you a really high returns on your investment, but you also run the risk of losing your money, as it depends on a highly volatile stock market. So in short, this is not for faint-hearted individuals, if you think yourself to be good at judging markets and its fluctuating behavior, this could be for you !!
- Mutual Fund: If you are keen to take the benefits of higher-risk investment areas like stocks and bonds, but don’t feel confident about it, because of high risks involved, mutual funds could be the answer !!
- Money Market Fund : It’s a special kind of short-term mutual funds, wherein we can withdraw money anytime. This is considered as the safest form of mutual fund. The rate of interest is lesser than fixed deposit but more than saving account.
- Life Insurance: There are plenty of insurance plans, , like money back plans, endowment plans, which give you returns at the end of maturity/completion of your insurance term. Usually returns in insurances is in single-digits and you can’t withdraw your money in between your premium paying terms.
- Unit-Linked Insurance Plan : ULIP is basically a combination of mutual fund and an insurance policy. Hence you enjoy the good things of investment funds i.e, more returns, along with the insurance cover in a single investment option. In the short term, the gain is not high due to several administration and hidden charges, so it’s better to stat invested for long time interval.
- Real Estate: With the real estate sector booming in India, this is another lucrative sector, where you can park your money. In fact, you choose the location smartly, you can easily expect quick returns on your investments.You can also get huge tax benefit by taking home loans.
None of them can be called as perfect and safe to blindly put your money in. Each one of them has they own advantages and disadvantages. So it solely depends on you, as to what suits best to your needs. After all, its your money 🙂