Investment is a necessity to grow your money for the future. While there are various types of investment options to choose from in India, one should keep in mind their age and their requirements for investment. This includes deciding whether
- To invest long term or short term
- To invest in risky or risk-free investments
- To check liquidity requirements in case of financial emergencies
You need to take into consideration these factors while selecting your investment avenue.
While choosing an investment plan from the various investment options, it is critical to match the risk profile of the investor, that is, you with the related risk of the product.
Investment can be best when it is easy to invest. The following are the best types of investment where you can invest your money easily.
Senior Citizens’ Saving Scheme (SCSS)
SCSS is a 5-year investment option for most retirees and can be availed by anyone above 60 from a post office or bank. The tenure can be further extended by 3 years once the scheme matures. With an upper limit of Rs. 15 lakh, the interest rate on scss scheme is payable quarterly and is fully taxable. It is easy to invest in an scss scheme with a minimum deposit of just Rs. 1000
Equity (Stock) Market
The stocks are a highly volatile asset class. There is no guarantee of return over a certain period of time as it is difficult to time your entry and exit in the stock market. You need to have a lot of research and skills to understand the behavior of the stock market to predict patterns and to buy the right stocks. Investing in stock is therefore not everyone’s cup of tea. The only good part about investing in stocks is that they are able to deliver higher than inflation-adjusted returns compared to all other asset classes.
With the coming of fintech apps which let you invest with simple steps. It has become easier than ever before to invest in stocks.
Public Provident Fund (PPF)
PF fund is a retirement savings scheme offered by the Government of India with the aim of providing a secure post-retirement income. PPF has a long tenure of 15 years and interest is huge especially in the later years. It does make a safe investment but your money is locked for that period of time. It is simple to invest in a PPF with a minimum amount of just Rs. 500.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY is another scheme for senior citizens aged 60 years and above. It provides them a return of 7.4% per annum. The scheme offers pension income from the options of paying monthly, quarterly, half yearly or yearly. The pension amount ranges from Rs. 1000 per month to Rs. 9250 per month. The tenure is 10 years with a maximum investment of Rs. 15 lakhs
7.75% GoI Savings Bond
Government savings or G- Sec bonds have replaced 8% savings bonds. These GoI Savings bonds were launched in 2018. The investors get an annual interest at 7.75% interest rate. You can invest a sum as low as Rs 1,000 in these bonds.
Mutual funds are an investment option where a fund manager manages your account by investing your money in stocks and bonds based on their experience. In an actively traded Mutual Fund, the returns are largely dependent on the ability of the fund manager to generate returns by investing the client’s money in equities and bonds.
Last but not the least is one of the most important investments. A bank Fixed Deposit is considered a safe investment option with the least amount of risk and highest form of liquidity. A fixed deposit is an investment of your savings to earn a higher rate of return than a regular savings account. It is offered by banks and NBFCs (Non Banking Financial Companies).
A fixed deposit has the lowest risk in the portfolio of investment. Money is invested in a fixed deposit with a lock in period and interest is given either at the end of the maturity date or as a regular payout. Investing in Fixed Deposit is a very smooth process and can be done at the tip of your fingers. You need to go through Fixed Deposit schemes of different banks and select the one as per your needs and requirements. Bajaj Finance Fixed Deposit is said to have one of the highest returns with an interest rate of upto 6.75%.
These are one of the best investment options in India in 2021. To grow your money with easy liquidity and guaranteed returns with less risk, Fixed Deposit is the best investment options of all.