In this article, know everything about money investment and various strategies to make make the right investment in future.
Wealth management is crucial to have a financially safe and secure future. Usually, when you think of the future, you plan on saving some money from your earnings and keeping it separated from the expenses.
But, savings is not the answer to growing your money in most cases. Savings accounts hardly provide any interest on your money; therefore, you may or may not get any bigger returns by the end of the saving period.
This is the reason why you should pick a better investment option that will give higher returns. Usually, when people think of high-growth investments, they think of equity and bonds.
However, there are plenty many investments that you can choose from that range from short-term to long-term, to low risk and low risk to high risk and high growth.
Top 5 Investment Options
Following the top 5 investment options that will help grow your money actively:
One of the most popular types of investment avenues for investors in India is mutual funds. Equity investment can take up a lot of time and money, as researching the market is something that requires a certain expertise level.
Also, investors will require a large amount of money to invest in certain types of shares that will give good returns. Therefore, you can say that it is not for everybody out there planning to invest.
This is where mutual funds come in. They are a perfect investment choice for those who want to play comparatively safe and want good returns without much work. Mutual funds are funds created by fund managers or fund management companies.
Mutual funds bring together various investors with similar goals to invest a certain amount of money. Then the fund will invest these amounts in various assets like equities, money market avenues, bonds, etc. the amount that the fund will earn from these investments, will then be divided among the investors who are part of the mutual fund.
These finds are regulated by SEBI and therefore, one can say that it is quite safe to invest in them. You can find different types of mutual funds that state different strategies and you can choose based on your financial objective.
Post Office Saving Scheme
One of the best ways to invest money is in avenues that are backed by the government. One such investment instrument is the post office savings scheme.
Now, the post office is one of the oldest government organizations. One might think that the post office’s main objective is to deliver and collect mail.
But, many may not know that post office also offers various other services like investment, insurance, banking, etc. one can also save taxes on some of these schemes under section 80C of the Income Tax Act.
One of the reasons why these investment schemes are so popular across the country is that they help build a habit of saving a certain amount of money every month in a more disciplined way. Most of these schemes help save for retirement or daily interest.
There are different types of schemes that one can choose from:
- National savings recurring deposit
- National savings time deposit
- National saving certificate
- Monthly income scheme
- Sukanya samriddhi account
- Senior citizen saving scheme account etc.
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National Pension Scheme (NPS)
Initially, only the central and state government employees were given pension schemes for their post-retirement earnings. But, in 2009, this was discounted and a new scheme was launched for all the citizens of India.
This new scheme is called the National Pension Scheme or National Pension System (NPS). The pension fund regulatory and development author is the body that governs the NPS.
There are usually two types of accounts under this scheme, tier 1 with tax benefits and which is mandatory and the other one is tier 2 which has no tax benefits.
This scheme is launched by the government to make sure that the general public will have a way to save for their retirement, for which they are also given various benefits to grow their wealth.
You will get long-term benefits as the scheme allows investors to get good returns by the end of the term.
Also, you can choose the type of investment asset class for investment. The minimum annual premium starts from Rs.500 which makes it easy for everyone to open an NPS account. You can also withdraw partial money from the account in case of emergencies.
Public Provident Fund (PPF)
A public provident fund is again a government-backed scheme that allows investors to invest for the long term and make good returns. In this, you can get good interest as per the norms, thus reducing the risk greatly.
Also, there are multiple benefits like multiple investor-friendly features. This investment avenue is not market linked and is therefore less volatile as compared to other investment options. Those investors, who have less risk appetite, can choose PPF for their investment portfolio.
One thing to keep in mind is that PPF is a long-term investment option. The lock-in period of PPF is of 15 years. Before this, you cannot withdraw the returns.
However, you can withdraw the partial amount from the PPF after 6 years. It is also an EEE-type investment option which means the maturity amount; principal amount and interest are all eligible for tax deductions.
You can get tax deductions under section 80C of the Income Tax Act.
Unit Linked Insurance Plans (ULIP)
If you are looking for investment options that will provide good returns as per market and will also provide life insurance coverage, then ULIP or Unit Linked Insurance Plans are perfect for you.
In this investment plan, you can invest in market liked securities which will give higher returns if you have a higher risk appetite.
These ULIPs are provided by insurance companies. The premium you will pay will be used for investing in various investment opportunities. A part of the premium will be kept for investment in equities, bonds, securities, etc.
And another half will be kept as a premium for life insurance coverage. You can switch their choice of investment. The fund manager will manage the investments.
Also, there is a lock-in period of 5 years on ULIPs. You can get tax benefits under section 80C of the IT act.
You should always find new ways to invest to grow your assets in long term.
However, choosing government-backed investment options or low-risk avenues will help safeguard your hard-earned money and will also give back a good amount of returns for future stability.
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