In India, why do people work hard to earn money? Absolutely, for enjoying luxury and achieving financial freedom. People tend to admire and enjoy retirement in their lives; for that, it is not sufficient to work alone; your money should also work for you. Now you might be thinking how that is possible.
Is Your Money Working for You?
If you keep your money in your locker then it will not grow, it will be just resting in peace. You should put your money to work for you & your money will be earning for you, which will result in a gradual increase in returns. Investing your money will result in high returns and an assured sum of the amount during your retirement.
1. Direct Equity
This investment consists of investing your money directly into stock markets and if you do not have adequate knowledge you might lose your fortune during an inappropriate exit of a fund.
The only way to earn is to withdraw during a perfect time or have a horizon of more than 3 years, which will ultimately lead you to high returns. The risk here is high and you should consult a financial adviser before having a Demat account for buying and selling stocks.
You should consider the performance of a company and its background, which will allow you to analyze whether is it worth investing in its share or not. Some people consider it as gambling but in the actual world, it is a precise calculation based on forecasting with necessary considerable factors.
2. Equity Mutual Funds
Mutual funds in equity are also a high risk of investment, which is done indirectly. In this, you invest through a registered AMC into equity markets. The money can be invested with major 2 plans SIP – systematic investment plan & lump-sum.
SIP has a monthly investment of some predefined amount for a certain period and lump-sum has a one-time deposit of amount. The money you have invested will be managed by a fund manager, who will allocate your investment funds to various companies, and schemes, that tend to be profitable.
These fund managers are highly qualified and professional and deeply analyze the scheme or company before any investment as a huge amount of investments is at stake. They generally follow an aggressive way of investment in equity where you might get a huge profit in the short term but there is more fluctuation in this investment.
Any type of equity Mutual Fund and SIP you consider must have a big horizon for investment, as these schemes tend to provide returns in large horizons of deposits.
3. Debt Mutual Funds
Debt mutual fund is a secure option to invest in SIP and Mutual Funds which are invested into treasury bills, corporate bonds, government securities, money markets, and others that have a predefined maturity date and rate of interest.
You will be gaining interest and appreciation in your total amount by investing in this mutual fund. Investors can see the ratings of the schemes, which are provided by FITCH, IRCA, BRICKWORK, CRISIL, & CARE.
4. National Pension System (NPS)
In India, the National Pension System is featured as a voluntary contribution to take benefits during retirement. The NPS was first introduced to only government employees later it was opened to all the citizens of India who are in the age range of 18 to 65 years.
The PFRDA authority of India manages the NPS and regulates the money flow for benefits. This scheme investment will allow you to get an assured monthly sum amount after your retirement and in some cases, they get a bonus amount. You can add a nominee which rely on your pension & which is most probably your spouse.
5. Public Provident Fund (PPF)
Public Provident Fund can be termed as the most popular type of investment, which is loved by the people of India for its quality of being secure. The interest rate of this scheme keeps on fluctuating, which can be determined by the government announcing it every three months of tenure.
The benefits received in the form of interest will be credited into the beneficiary’s account at the financial term end of the year, which is in March. You will get the rate of interest for every month by the authority of India. Indian citizens can invest a minimum amount of 500 and a maximum of up to 150000 INR.
6. Bank FD
The Bank Fixed Deposit is considered the most secure way of investment as compared to other equity and debt markets. With this investment, you can easily get a fixed amount of interest and its rate is fixed by the bank.
It can be considered as the most assured way of reliable investment. The investment tenure is quite long if you are expecting high returns without taking any risk.
This scheme requires an in-depth analysis and only banks must be preferred for FD investments. All the banks offer different rates of interest so invest where it is the most reliable, you can opt for government banks like SBI.
7. SCSS
Senior Citizens’ Saving Scheme is the best option for persons above 60. Banks provide them with more than eight percent of interest which is very good.
This scheme ensures security for all the old people and retired ones. The maximum amount an individual can invest under this scheme is 15,00,000/- INR. There is no limit on the number of accounts that can be opened.
The account holder has the right to open a joint account also and can opt for yearly, monthly, or quarterly crediting of the interest. It is supported by the Indian Government and, therefore, provides the best securities for your investments. The retired Indian population is taking a lot of benefits from this scheme.
8. RBI Tax Bonds
The Indian Government has overridden the previous bond with a 7.75 percent savings taxable bond. The RBI tax bonds have an investment tenure of around 7 years. These bond-type investments are for investors having a conservative approach.
The interest rate in these schemes is not that much high so the people opt for more benefit schemes, which are useful in their retirement, and provide more rate of interest.
9. Real Estate
The house that you are currently residing in can be rented if there is enough space to give it on a lease otherwise do not consider this type of investment unless you buy another property with the motive of investment.
The house, flat, plot, shop, or any other real estate you bought must be analyzed completely so that you will a good return after you sell it. This is the investment, which earns you in two ways.
The first is an appreciation that you will be getting on its original value and the second one is the rental, which you will get every month. This investment is very difficult to liquidate therefore if you assume to have money shortly then this investment is not considerable.
10. Gold
Investment in Gold can be considered the most expensive and risky form of investment. The gold value fluctuates daily and rises in the duration of marriages. If you are considering your investment
For a short time deposit and earn then consider investing in gold coins or bars, gold mutual funds, ETF, gold deposit schemes, etc… You can get your fortune invested in paper gold, which is also the best option if you are planning to go for gold.
