Young adults who have just started working may not find themselves investing in the future. However, this is the age when you can make some of the wisest investment decisions and create a nest egg for the future.
Investing early in your life can ensure your money grows with time and provides you security in the times to come. There are numerous investment options available for you to choose from, depending on your risk appetite.
Here are a few investment options to consider
These deposits can offer you a higher interest rate with more excellent stability.
- They offer high stability and security, along with a flexible tenor to suit your requirements.
- You can choose from cumulative or non-cumulative FDs. Cumulative FDs provide higher returns, while non-cumulative FDs are good for periodic income.
- They may or may not offer you premature withdrawal, depending on the terms of the lending institution. In addition, premature withdrawals could be charged depending on the conditions of the company.
- These deposits can be easily renewed after the lapse of the tenor. Sometimes, renewing with the same financial company can also get you a higher interest in your FD investment.
- This option involves investing money in market securities.
- These securities are issued on a yearly or monthly basis by organizations seeking to raise cash.
- This option can provide you with rates of return ranging from 8% to 9%. This investment option can give high returns in a short period.
- However, the returns from this option are not guaranteed and depend on market fluctuations.
- You can choose to invest in various mutual funds, like diversified funds, gold mutual funds and more.
- Choosing to invest in SIPs monthly may be the most prudent option for you.
Recurring fixed deposit
- Working on similar terms as the FDs, this option allows you to invest a sum of money monthly rather than making a lump sum investment.
- The interest for recurring deposits is accumulated over the tenor and paid out at the lapse of the tenor.
- Premature withdrawals may be prohibited or penalized depending on the terms of your lender.
- This option can also offer you higher interest rates.
- This option provides safe and guaranteed returns but might not be enough to overcome inflation.
- The public provident fund is a safe vehicle for investment provided by the government.
- It involves investing in a public government fund, which provides accumulated returns at the end of the tenor.
- The tenor for this plan goes up to 15 years.
- It is ideal for salaried investors who prefer investment of small sums over a monthly basis.
- The investment amount can range from Rs. 500 to Rs. 1.5 lakh, giving you the option to choose what you can afford to invest.
- These are the same as fixed deposits but with a high amount of flexibility.
- The returns from these deposits are guaranteed, and you can choose the tenor.
- This option allows premature withdrawal with prior notice. There is no penalty charged over premature withdrawal.
- The tenor can either be short term or long term depending on your requirements.
Young professionals who have just started working can invest in any of the options above for short- and long-term gains.
Ensure that you choose multiple means of investment based on your income, your risk appetite and your goals for the future. For example, an FD should be a part of your diversified investment portfolio as it offers fixed returns and premature withdrawal.