May 16, 2021

Best Way to Invest Money

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“Mutual funds’ investments are subject to market risks. Please read the offer document carefully before investing”, We are well-known disclaimers for all mutual fund advertisements. Depending on the type of fund, the risk factor also varies. Investments that are prone to wild fluctuations are considered highly risky. For example – Equity funds are considered more unpredictable, especially during the medium term. Debt funds also carry risks but are generally considered safer than equity funds. Here in this post, we are going to share with you the best way to invest money.

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Public Provident Fund

Public Provident Fund (PPF) is a government-backed investment scheme that will help its clients enjoy risk-free investment for the long term. The interest rate on PPF account is revised and paid every quarter by the government. The current interest rate is 7.9%. PPF has a maturity period of 15 years. However, the money in your PPF account can be partially withdrawn only after a period of 6 years. However, one can take a loan on PPF account balance. Since the scheme is regulated by the government, the principal and accrued interest are fully protected. In addition, PPF comes under the EEE category (exempt-exempt-exempt) in which principal amount, interest earned and maturity amount are exempt from tax. Contribution to PPF account (up to Rs 1.5 lakh per year) is eligible for deduction under Section 80C of the Income Tax Act.

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Fixed Deposit

For investors looking for attractive returns with the lowest risk, a fixed deposit (or FD) is the best investment route. By investing in fixed deposits, you can get assured returns at fixed time intervals. This investment avenue is one of the most preferred options in India, due to its convenience and flexibility. Even investors with a high-risk appetite choose to invest in FDs to diversify their investments and stabilize their portfolios. When investing in fixed deposits, the investor has the option of choosing cumulative deposits or non-cumulative deposits. In the cumulative option, the interest is reinvested into the principal amount and is payable at the time of maturity, whereas in the non-cumulative option, the investor is paid interest as per the underwriting.

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National Pension System

The National Pension Scheme is a pension scheme regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA). If you are an Indian resident between the age of 18 years and 60 years, you can open an NPS account. Are you planning your investment for a good retirement fund but giving higher returns than other schemes? Here is a good option. The National Pension Scheme (NPS) is a government-backed scheme that allows investors to invest in market related instruments such as equity and debt; The final pension amount depends on the returns of these investments. There is a 75% to 50% equity risk for the National Pension Scheme which stabilizes the risk-return ratio for investors.

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Real Estate

The house you live in is for self-consumption and should never be considered an investment. If you do not intend to live in it, the second property you purchase may be your investment. The location of the property is the single most important factor that will determine the value of your property and also the rent it can earn. Investment in real estate provides two ways of return – capital appreciation and rent. However, unlike other asset classes, real estate is highly specialized. The other major risk lies with obtaining the necessary regulatory approvals, which have been largely addressed after the arrival of the real estate regulator.

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