Amid uncertainties and falling interest rates, people are trying to set aside funds for emergencies, secure retirement finances, and manage their daily expenses. An intelligent way to grow wealth and cater to everyday needs is to invest your money in suitable instruments. While there is no shortage of investment instruments and savings schemes offered by the government, bank and other financial companies, it is vital to ascertain the safety and returns provided before you invest.
If you’re planning to invest your money, here are the best investment schemes to help you save for your future financial needs.
1. Mutual funds
You can invest in mutual funds if you want to explore and benefit from equities and debts, which gives you an option to balance risk and returns based on your preference. Investing in the share market through mutual funds is safer than making a direct investment in the stock market.
You can also consider starting a Systematic Investment Plan (SIP), one of the best ways to invest in mutual funds by making small regular investments.
2. Fixed deposit (FD)
For those looking to offset risk with guaranteed returns, investing in a fixed deposit is one of the smartest choices. When investing in FD, you deposit a fixed sum of money for a specified period and earn interest at a fixed rate of return. However, if you’re looking for higher interest rates, choose to invest in FDs that offer high-interest rates and greater flexibility in terms of tenor and frequency of periodic interest payouts.
In emergencies, you can also consider breaking your FDs prematurely or taking a Loan against Fixed Deposit. You can also consider re-investing the interest to receive a lump sum amount after your FD matures. Senior citizens can earn higher interest rates on their deposits, which helps them manage their post-retirement expenses efficiently.
Consider investing in Bajaj Finance Fixed Deposit, which offers one of the highest fixed deposit rates, along with the option to choose cumulative or non-cumulative fixed deposit. In addition, you can select the frequency of your interest payouts, which can be monthly, quarterly, half-yearly or yearly. Furthermore, Bajaj Finance Fixed Deposit has the highest safety ratings of FAAA by CRISIL and MAAA by ICRA, which ensures that you can earn assured returns easily.
For those looking to lock into attractive interest rates of up to 7.45% p.a., consider investing in Bajaj Finance online FD, where you can benefit from an end-to-end paperless procedure. Amid falling bank FD interest rates and increasing market volatility, now is the best time to grow your savings with Bajaj Finance FD.
3. Public provident fund (PPF)
As the safest and most popular investment option in India, PPF is a government-backed long-term saving scheme that is tax-free. The amount of money deposited in PPF is available as a deduction under section 80C of the Income Tax Act, and the interest earned on PPF is also not taxable.
PPF may be opened in a bank or post office, where your money gets invested for 15 years and can be extended by another 5 years. There is a lock-in period of 5 years, and presently, the PPF investments earn compound interest at 7.10% p.a. You need to make a minimum annual investment of Rs. 500 and can make a maximum investment of about Rs. 1,50,000.
Additional read: 5 best recommended investment schemes for senior citizens
4. National saving certificate (NSC)
NSC is popular government-backed saving option that provides guaranteed returns with tax savings. A safe investment, you can invest in NSC at any post office for five years. The interest rates on NSC is decided by the government and is reviewed every quarter.
However, the interest rate does not change during the tenor of NSC once your investment has been made. Presently, your investment in NSC yields returns of 6.80%, which is compounded half-yearly.
A minimum investment of Rs. 500 can be made in NSC without any maximum limit. The best thing is that you can claim tax deductions but to the maximum amount of Rs. 1,50,000 under section 80C. Keep in mind that the interest earned on NSC is taxable, so when filing your tax returns, you must add the interest accrued on NSC to your total income.
5. Equity linked savings scheme (ELSS)
As the name suggests, this mutual fund scheme helps in parking your equity investment. ELSS are tax-saving mutual funds that allow a deduction of up to Rs. 1,50,000 under section 80C. It comes with a lock-in period of 3 years.
You can earn higher returns by investing in ELSS since all the investments are made in the equity market that can help you beat inflation, but there is always a risk attached to investing in equity. An investment in ELSS can be made from as low as Rs. 500, and there is no maximum limit on investment in these funds.
It is wise to choose a combination of these investment options and schemes and spread your risk by investing in safe options like fixed deposits and diversifying with options like mutual funds. You can also calculate your returns by using a fixed deposit calculator. Being prepared for your financial wellbeing and planning in advance is the right way to ensure that you and your family are ready to deal with all kinds of financial contingencies.
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