A good way to leverage your earnings is to invest. However, most risk-averse individuals stash their earnings in a savings account. While this allows for easy liquidity, it also bars you from earning additional income. This is due to the fact that the interest earnings on a savings account are negligible. Furthermore, if your goals require ample funding, then just having money in savings will not be of much help as it will not permit any growth.
At this stage, look at the different types of investments and choose where to invest money as per your risk appetite. To help you get started, here are a few lucrative options to invest your money in.
Fixed Maturity Plan
This type of investment in mutual funds is an exceptional instrument to introduce yourself to the market. It has incredible short-term benefits because of its potential to bring in significant returns without the need for a lengthy lock-in period. Generally, mutual funds carry a high risk and this is why the average Indian steers clear.
However, FMPs invest in debt funds such as treasury bills or government bonds. This makes them a lot more lucrative and safer as these assets are government-linked. Additionally, FMPs help you save on tax payments. This is because they are closed-ended in nature, meaning investments only happen during the final phases of the tenor.
This is where indexation comes into play and you enjoy higher returns as a result of lower tax payments. With a good fund manager, FMP investments can bring in returns on average between 8% and 11%, however, this depends on the market.
Public Provident Fund
This Government of India backed long-term investment offers an interest rate of 8% currently which resets every quarter. The minimum investment amount for a PPF is Rs.500 and can be availed by anyone over the age of 18. This scheme matures after a 15-year term, allowing partial withdrawals after the 7th year of investment. Interest earnings through this investment are not subject to taxation and you enjoy additional tax benefits on the investment amount as well. Furthermore, after the initial tenor of 15 years is up, you can extend the investment in blocks of 5 years to grow your wealth even further. The long lock-in period in combination with compounding interest translates into high earnings at the end of the tenor.
Fixed or Term Deposit
A fixed deposit is favoured from the various types of deposits in the market, simply because of its benefits. Term deposits offers high fixed returns with a low-risk quotient. FD interest rates are unaffected by market volatility and so, you enjoy investment security right from the first day. Typically, term deposits are offered by two major issuers, banks and NBFCs.
When it comes to just profits, NBFC FDs offer higher interest rates making them a lucrative investment option. Furthermore, NBFCs have shorter investment tenors and lower lock-in periods allowing you to combat inflation and take advantage of the updated rates. Similarly, some issuers even allow you to benefit from a renewal bonus which adds to your existing interest rate. Use this to your advantage to grow your wealth by a significant amount.
While there may be various types of deposits in the market, the Bajaj Finance Fixed Deposit stands out from the competition. This is due to the fact that it offers a high interest rates up to 8.95% for senior citizens and 8.60% for regular investors at a tenor of 36 months and above with interest earnings payable at maturity. The minimum investment amount of Rs.25,000 makes this FD incredibly easy to start with as well. Further, this term deposit offers added interest on renewal and the potential to earn more than 50% of your invested capital.
Equity Funds
Equity fund investments are a type of mutual fund that invests in the shares of companies. The profit earned depends on the performance of the company during the tenor and so the risk quotient is a lot higher. Due to this fact, the possible yield is also much greater.
Equity fund investments are divided into 3 variants based on market capitalisation. These are large-cap, mid-cap and small-cap. Depending on your goals, your fund manager will employ a healthy mix of the 3 types. Besides the high yield factor, this type of investment is typically designed for long-term holding making it a lot more profitable as the company flourishes. Any profits you make, depend on the expertise of the fund manager and your own knowledge of the market.
Gold
This investment is considered evergreen simply because of its tendency to grow in value. Owning gold is extremely valuable because it is an easy asset to resell as both banks and private buyers are constantly looking to buy. Due to this fact, the gold market is constantly fluctuating and depending on your market knowledge, you can turn a profit within no time. Typically, financial advisors suggest having no more than 10% of your investment portfolio invested in any gold-related avenues. This is because the value is affected by demand and general prices. Identifying these instances requires a trained mind and so does knowing when to sell.
Now that you know the most lucrative types of investments, you can choose where to invest money with ease and more responsibly. While considering these types of deposits, pick an option that can earn you profits without high risk. Doing so not only helps you grow a healthy corpus, but alleviates you from the investment stress that comes along with it.
You will notice that a fixed deposit is the safest high-yielding investment and you should take advantage of market-leading offerings while the rates are up. You can even initiate the investment procedures online, simply fill out the application form and authorise the issuer to get in contact with you to discuss the particulars of your investment.
