As humans, we all have an innate desire to save for the future, but sometimes we are just left perplexed as to which is the best place where money can earn more. We all look the best avenues to invest so that we can build wealth by enjoying a profit over time. People can invest in various tangible items (like real estate, jewelry, or antiques) to sell them later. But here in this post, we are going to focus primarily on bank and stock market investments.
Stocks:
A stock market is a place where people buy and sell different types of asset. They could be shares of a company or assets like gold, silver, metal, oil, and other commodities. Usually, shareholders gain money when the stock or asset that they have bought performs well, but they can also face if the asset does not perform according to expectation and hence, stocks are considered the high-risk investment. To deal in the stock market, you would need to open a demat account and link it a bank account.
Bonds:
Bond is another popular form of investment which are debts owed by governments or corporations. When you choose to purchase a bond, you are lending your money to the issuer of the bond. Investors earn money by earning agreed interest. They are considered a much safer investment as compared to stocks because bond issuers are obliged to repay their debts. Bonds are considered a safer investment. However, you cannot expect exponential growth like you can witness in the stock market.
Mutual Funds:
Mutual funds are groups of stocks and assets, which are created as well as managed by financial professionals. People who do not like to do much research on individual stocks should put money in mutual funds.
Fixed deposits: If you are not sure about speculative markets, then you can put your money in a conventional fixed deposit scheme. A fixed deposit offers a uniform interest flow, and you earn higher money as compared to putting your money in a normal saving account if you do not break the fixed deposit before its maturity date.
Sukanya Samriddhi Yojana: Sukanya Samriddhi Yojana is a very recent government-backed savings scheme which has been launched under the banner of “Beti Bachao, Beti Padhao.” The scheme is only valid for the girl child. The account can be opened by the parents of a girl child if the child is below ten years. The account will mature when the girl will turn 21 years or when the girl marries after attaining the age of 18. The rate of interest is usually .5% higher than PPF rates. The maximum tax-free amount invested in an SSY is Rs. 1.5Lakhs. The current interest rate offered in SSY account is 8.5%
Investing in Bullion: Buying and selling in Bullion or precious metal can be done in either in a physical bullion form or in paper form. If you wish to buy it in paper form, then you must have a demat account which is linked to a saving form.
PPF: Public Provident Fund or the PPF is a savings scheme which is offered by the Government. The interest earned is paid by the government of India. The interest earned is much higher than what fixed deposits offer. The interest is also tax-free. The maximum tax-free amount invested in a PPF is Rs. 1.5Lakhs. The current interest rate offered in PPF account is 8%
Insurance: Insurance is protection from financial loss in case of contingency services. You can choose to invest in life insurance to safeguard your family against unforeseen circumstances, or you could choose to invest in health insurance or retirement funds.
Ideal Investment Portfolio: An ideal investment portfolio should be diverse. It is a popular proverb” Don’t put all your eggs in one basket,” this means you should diversify your investments so that in case one investment type does not work well, the other one balances it out. So you should invest in stocks, mutual funds, fixed deposits, government schemes, bonds, etc. Just manage your risk and funds carefully.
Now that you have got the hang of basic investing terms so let us start researching and investing. But remember to diversify your savings in different investment tools!