We all believe in investing our money to attain financial security and bring stability for future. Investment options give you the best of both the worlds – growing your money and insuring your life. There are many options available in the market that can suit your pocket, risk taking appetite and other financial goals. Investing and saving for the future enables you to meet your short- and long-term responsibilities like children’s education, your retirement, wedding of your children etc. Through tax savings you can also save a substantial amount of money for future.
Life Insurance can also be considered a better investment plan in current scenario as it serves dual purpose – offering financial protection to the insured and safeguarding the nominee or the family.
As the financial markets continue to remain volatile, most of us are now seeking options through which we can grow our corpus. Usually, investors with low risk appetite have turned to conventional investment instruments such as PPF, RD and Fixed Deposits to ensure their money remains safe and grows over time.
If you want to invest or have a long investment plan in the current market situation, here are few ways where you can grow your savings this year –
Public Provident Fund (PPF) – It is a government backed investment instrument where you can remain assured about your money. Government has decided to keep the interest rates for small saving schemes unchanged for the quarter ending March 2021, which means it will continue to carry an annual interest rate of 7.1 percent
While PPF has higher rate of interest compared to other investment options, it usually has a lock in period of 15 years. You can only make partial withdrawals from your PPF account after 5 years.
Recurring Deposits (RD) – It is another investment instrument that is preferred by risk averse investors. During the current market scenario, you can choose to invest in a 5 years post office RD, where you can get interest rate up to 5.8 percent.
Fixed Deposit (FD) – It has always been the go to investment instrument for investors during the times of market volatility. It allows you to grow your corpus and enable it to grow overtime.
However, FD rates have been going down over the years but it does not have a lock in period like PPF.
National Pension Scheme (NPS) – This is also a government backed investment instrument and is managed by the Pension Fund Regulatory and Development Authority (PFRDA). This is a combination of different investments including fixed deposits, corporate bonds and liquid funds and so interest rates vary across the funds.
Gold – It has always been banked as an investment instrument by Indian households from so many years now. Today, you don’t have to purchase jewellery, gold coins or bars to invest in gold. Now you can invest in gold exchange trading funds and sovereign gold bonds. Sovereign Gold Bonds are issued by the Reserve Bank of India on behalf of the Government of India with an assured interest of 2.50% per annum. The bonds are denominated in units of grams of gold with a basic unit of 1 gram. The maximum investment one can make is of 4 kg and are the safest way to buy digital Gold.
The above five options are relatively safe in the current times and you don’t have to worry much about the market fluctuations, stagnating or eating up your investments. These can help you to keep your money safe and grow this year.