Different investment schemes
are available in the market today. Some of them help you to meet your short
term investment goals whereas some ensure that your long term objectives are
fulfilled. Some investment options enable you to earn better through tax
savings.
Therefore, you will have to
choose the investment options that are suitable for your investment profile.
Some of the popular investment schemes include mutual funds, fixed deposit plans, recurring
deposits, PPF, etc. We will be discussing the most popular investment schemes
that you can avail in this year:
Mutual
Funds
Mutual Funds are lucrative
because they provide higher returns than some of the other investment
instruments. There are different mutual fund types such as equity mutual funds,
debt mutual funds, hybrid mutual funds, etc.
The returns of mutual funds
are dependent on market performance as your invested amount is further invested
in stocks, bonds, and other market-linked instruments. Since the market is
volatile due to the ongoing economic crisis, you must be careful before
investing in mutual funds.
POMIS
POMIS i.e. Post Office
Monthly Investment Scheme is a popular and safe investment option since it is a
government backed scheme. You need to invest a particular amount every month
and the entire savings can be withdrawn along with the interest after a tenor
of 5 years.
Currently, an interest rate
of 6.60% is offered on this scheme and you can start investing with as little
as Rs. 1500. However, it does not provide any tax rebate on the returns and
therefore, it is not an ideal option if you are looking for tax-saving
instruments.
Recurring
Deposits
A Recurring Deposit or RD is
an investment scheme that provides returns without any risks. You can deposit a
fixed amount every month in your recurring deposit account and the tenor for
these deposits can be set between 1 to 10 years as per your convenience.
The interest rate offered on
RDs ranges from 6 to 6.5% depending on the bank in which you have opened an RD
account.
The interest earnings of an
RD are lesser as compared to an FD. This is because the
interest on an FD is calculated on the entire deposit whereas the interest rate
on an RD is calculated only on the progressive monthly deposits.
Public
Provident Fund
Public Provident Fund is an
excellent option for the salaried individuals since it allows them to invest a
part of their income every year. The entire amount can be invested at once or
can be invested in installments up to 12.
It is a government-backed scheme
and its interest is revised after every quarter. Currently, an interest rate of
7.10% is offered on PPF which means that your savings will grow at a steady
rate.
The interest earnings of PPF
are tax-free. However, it is only suitable if you are interested in long term
investments since its maturity period is 15 years.
Fixed
Deposits
Investing in the fixed
deposit will ensure that your savings grow at a faster rate and that too in a
risk-free way as it is not a market-linked instrument.
Banks have slashed down the
interest rate on the fixed deposit plans owing to the current economic crisis.
However, non-bank FDs can still help you to earn better returns.
For instance, Bajaj Finance
FD is offering interest
rates up to 7.60% for regular customers and the
senior citizen FD rates are as high as 7.85%. Also, instead of depositing your
funds in a single FD, you can invest in fixed deposits of different tenors and
types to ladder your investments and gain maximum returns if the interest rates
tend to fluctuate over a period of time. The option of depositing in multiple
FDs through a single cheque is provided by the multi-deposit feature from Bajaj
Finance FD. Also, these deposits are safe since they have received high ratings
for stability and safety by credit rating organizations like ICRA and CRISIL.
You can also estimate your returns by using the online FD maturity
calculator.
Unlike most other fixed
income investments, a fixed deposit offers ease of investment with a 100% online
FD account opening process. Also, you get unmatched flexibility as you can
choose the investment tenor, interest payout frequency as per your convenience
and even go for premature withdrawal of funds or avail loan against FD in times
of financial emergencies.
