When it comes to building wealth, most people think about returns. But the real secret to lasting financial success? Protecting what you already have. That’s where risk management comes in.
In India’s evolving financial landscape—where market fluctuations, inflation, and personal emergencies can shake even the best-laid plans—managing risk is what keeps your long-term goals on track. From young professionals starting their investment journey to experienced investors safeguarding their portfolio, risk management is a must-have in your financial strategy.
And it doesn’t need to be complicated. With a few smart steps—like diversifying investments, planning for emergencies, and parking a portion in stable instruments like Fixed Deposits—you can make your money more resilient.
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What is Risk Management in Wealth Planning?
Risk management means identifying potential financial threats and planning ahead to avoid—or at least minimise—their impact.
Think of it as a financial safety net. Whether it’s a job loss, stock market correction, or a sudden medical bill, risk management helps you absorb shocks without derailing your financial goals.
In India, this becomes even more crucial due to rising inflation, economic volatility, and increasing life expectancy. A good risk management strategy involves:
Mixing fixed-income products like FDs with market-linked tools like mutual funds
Creating an emergency fund
Buying the right insurance
Rebalancing your portfolio regularly
Looking to add stability to your portfolio?
Start with a Bajaj Finance Fixed Deposit. It offers up to 7.30% p.a. returns with flexible tenures and guaranteed safety—perfect for weathering market volatility. Open FD Account.
Types of Financial Risks You Should Know
Here are the most common threats that can impact your financial planning:
Market Risk
Equity markets can swing wildly due to global events or policy changes. If your investments are heavily tied to the market, this poses a real risk.Inflation Risk
Rising prices reduce your purchasing power. If your returns don’t beat inflation, your wealth may actually shrink over time.Longevity Risk
With people living longer, there's a genuine risk of outliving your savings—especially if retirement planning is delayed.Liquidity Risk
Having funds locked in property or long-term instruments can be problematic during emergencies.
Need liquidity without compromising on safety?
Choose a Bajaj Finance FD with short-term tenures as low as 12 months. Enjoy guaranteed returns and the flexibility to withdraw when needed. Check FD Rates.
Credit Risk
Bonds or corporate deposits can default. Opting for AAA-rated or reliable instruments is key to reducing this risk.
By identifying these risks early, you can design a better and more secure financial strategy.
How to Manage Risk in Wealth Planning
Managing risk isn’t about avoiding it altogether—it’s about being ready for it. Here’s how:
1. Diversify Your Investments
Spread your money across asset classes like equities, gold, real estate, and fixed-income products. This way, if one underperforms, others can help cushion the blow.
2. Get Your Asset Allocation Right
Your investment mix should reflect your age, goals, and risk appetite. Young investors can afford higher equity exposure, while retirees may prefer low-risk options.
3. Build an Emergency Fund
Keep 3–6 months of expenses in a liquid fund or savings instrument. This prevents the need to break long-term investments during a crisis.
4. Buy Adequate Insurance
Health, life, and property insurance protect your savings from being wiped out by unexpected events.
5. Review and Rebalance Annually
Life changes, and so do markets. Update your plan every year to stay aligned with your financial goals.
Prefer safety and predictability?
Add a Fixed Deposit to your allocation mix. With Bajaj Finance FDs, you get assured returns, high safety (CRISIL AAA-rated), and a choice of payout frequency. Check Eligibility.
Also Read: Why is Wealth Creation Important
Conclusion
Your financial journey is like a road trip. While growth gets the spotlight, safety is what gets you to the destination. Risk management ensures your wealth plan can withstand bumps, detours, and even storms.
Indian investors often face uncertainty—from job instability to inflation and unpredictable returns. That is why taking steps like diversifying wisely, building an emergency fund, and choosing stable products like Fixed Deposits can make a real difference.
Want to make your portfolio future-ready?
Lock in up to 7.30% p.a. returns with a trusted Bajaj Finance Fixed Deposit.
Open FD Account and build stability into your financial plan.
Because at the end of the day, it’s not just about how much you earn—it’s about how much you keep, grow, and protect.
Calculate your expected investment returns with the help of our investment calculators.
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