Investment schemes for young investors

Here are some investment schemes for young investors to grow their money.
Young investors
4 mins
29 April 2024

Wealth is not generated overnight. To be financially independent and in a good place, individuals must start young. The earlier they start the better they can earn. This means developing savings and investing habits early on in life. The millennial generation now forms a majority of the workforce. This means they will be building families of their own and will have to manage finances independently as their parents did. To take such steep steps one should have their finances in place. Only saving will not help in growing wealth, investing it in the right tool will. This requires research and patience. But to make it easier, here is a list of a few of the investment options that young investors can consider choosing.

  • Direct Equity
    This investment option is entirely based on market movements and is very volatile. It is a high-risk high-reward kind of investment tool. Young investors can park their money in company-owned stocks. This is like investing in the company. If the company does well the stock does well, and the investor can earn generous returns much more than fixed income instruments like the FDs. However, if the company does not perform well the investor is at risk of capital loss. While investing in this asset class doing your due diligence is crucial.
  • Mutual Funds
    A mutual fund is a shared investment where multiple investors invest in a company’s stocks or bonds. You can earn the highest possible returns at a lower risk. Every investor owns units, which is a share of the holdings of the fund. The income generated from this investment is distributed between the investors. The risk depends on the type of stocks or bonds that you choose to invest in.

Mutual funds are a good option for investors with all risk appetites. They have flexible tenures and high returns as it is a market-linked option. It is also a very convenient investment tool that does not require constant monitoring as the fund is managed by a professional fund manager.

Mutual funds are market-linked investment tools. By investing in these you face the potential risks of capital erosion. However, if you invest for longer tenures, you can minimise that risk as well. When the market performance is optimal, you can yield great returns from this avenue.

Pro tip

Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.85% p.a. by investing for 42 months via our website and app.

  • Fixed Deposit

The fixed deposit is a sound instrument that does not get affected by dynamic market movements. The interest rate applicable at the time of booking an FD is maintained throughout the chosen tenure, making it easier to estimate the returns at maturity. This is a perfect tool to invest in to fulfil financial goals. It is one of the safest investment options available to date. Here the investor need not worry about losing the capital at all. Bajaj Finance offers fixed deposits at interest rates up to 8.85% p.a. (NBFC) also offers fixed deposit facilities. But since Bank FDs are backed by the central government, they are extremely risk-free. A few key highlights of the FDs are given below:

  1. Low minimum investment amount
  2. Flexible tenures
  3. Periodic payout option
  4. Online account management and booking facility
  5. Loan against FD facility
  6. High-interest rates
  7. Attractive returns

Click here to calculate your returns on FD using FD calculator.

  •  Systematic Deposit Plan

The Systematic Deposit Plan (SDP) is offered by Bajaj Finance. This is an industry-first monthly savings plan, perfect for young investors to start saving. You can start investing with as little as Rs. 5000 per month. Each deposit made goes towards making a new FD, which grows over time generating a handsome amount at maturity. The Systematic Deposit Plan (SDP) has two variants, the Single Maturity Scheme and the Monthly Maturity Scheme. The difference between these two is the payout frequency and the number of deposits.

The Monthly Maturity Scheme is a monthly income scheme where the investor gets the payouts every month. Every separate deposit made during the selected tenure matures at a different date like separate FDs. The tenure chosen applies to each deposit that you make. You can choose to make between 6 and 48 deposits throughout a flexible tenure of 12 to 60 months. This monthly income scheme helps you get a regular income. You can estimate your earnings even before you invest by using the Monthly Maturity Scheme calculator. This SDP calculator can help you plan your finances. This is one of the best monthly saving plans which can help in generating a regular monthly income to fund periodic expenses like rent, paying EMIs, etc.

Calculate your returns with the SDP calculator.

After going through these top 4 investment avenues, young investors can now make a well-informed investment decision to grow their wealth steadily.

Frequently asked questions

How can youngsters start investing?

Youngsters can start investing by choosing a suitable investment option that aligns with their financial goals. Bajaj Finance Fixed Deposit (FD) is a safe investment option that offers high and attractive returns with flexible tenure options ranging from 12 to 60 months. Investing in FD with Bajaj Finance is easy, and consumers can track the investment online. As a trusted brand with a stable and reliable reputation, Bajaj Finance offers investors a chance to grow their wealth and achieve their financial objectives. In conclusion, FD can act as a good investment option for young investors looking for a safe, stable, and high-return investment option.

Can I start investing at 25?

Yes, 25 is a great age to start investing. Starting early offers investors a longer time horizon to compound returns, enabling them to achieve higher returns with relatively lower risks over the long term. Young investors can start with risk-averse investment options like fixed deposit, mutual funds, and Systematic Deposit Plan, which offer lower risk and help balance their overall portfolios. Additionally, investing regularly in small amounts will add up over time, creating a powerful investment portfolio. By consulting financial advisers, young investors can create a sound investment strategy and achieve their financial goals over the long term.

Which are the safest investments for youth?

When it comes to investing, young investors often prefer safe and reliable investment options. The safest investments for youth include fixed-income options like mutual funds, bonds, and fixed deposits that offer predictable returns with lower risks. Bajaj Finance Fixed Deposits offer a safe and secure investment option with the highest safety rating of CRISIL AAA/STABLE and [ICRA]AAA(Stable). With flexible tenure options, ranging from 12 to 60 months and high returns up to 8.85% p.a. Bajaj Finance FD is a perfect investment option for young investors looking for a stable and high-return investment option.

What is the Digital FD offered by Bajaj Finance?

Bajaj Finance has launched a new FD variant called "Bajaj Finance Digital FD" for a period of 42 months. Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a. for senior citizens and for the customers below the age of 60 they are providing up to 8.60% p.a. The Digital FD can be opened and managed only through the Bajaj Finserv website or app.

How can youngsters make a 1 crore portfolio in 5 years?

Youngsters can make a 1 crore portfolio in 5 years by allocating investments across multiple assets and focusing on creating a diversified portfolio. They can consider investing in high-performing stocks, mutual funds, exchange-traded funds (ETFs), and other similar investment options but are subject to high risks. The risk-averse investors may consider investing in debt mutual funds, fixed deposits (FD), and Systematic Deposit Plan (SDP) for lower risk and steady growth. Regular investments, selecting the right asset mix, and reviewing investment portfolios quarterly are vital for compounding returns. Consulting a financial adviser can likewise help in making efficient money management decisions.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.