It can be really challenging to figure out how to invest your money. But investing a small amount of money can help you in the long run.
It’s a major misconception amongst people that if you have to do any kind of investment you need to have a lot of money. Which is just not true. One can start investing with as little as Rs 100 per month.
All one needs to do is to develop good habits by putting money into savings as an investment every month. If you start early, by the time you turn 60, you will have good amount of savings.
So, what are the steps one should take to start investing? Anupama Suresh Mehra of Elets gives you Five smart ways to invest your money:
1. Public Provident Fund
The Public Provident Fund (PPF) is most choose the way of investment by the individuals around the country. The main reason is that you can start the investment with as low as Rs 500 to a maximum of up to Rs 1,50,000 in one Financial Year. With this investment, one can avail services like loan, extension and withdrawal of account.
The PPF has a tenure of 15 years. It is a safe investment as the investment earned and the principle you have invested is backed by a sovereign guarantee.
2. Fixed Deposit
The safest choice in India is to invest in the bank’s fixed deposit scheme (FD). As per the rule by Deposit Insurance and Credit Guarantee Corporation (DICGC), each individual who has deposited in a bank is insured for up to Rs 1 lakh amount for both the interest and principal amount.
The individuals who are interested in taking this scheme can opt for a number of options like investing monthly, quarterly, half-yearly, yearly or cumulative interest option in them. The interest rate earned by an individual is then added to their income which is taxable as per one’s income slab.
3. Mutual Funds
Mutual funds are known to the millennial only by the advertisements. But what exactly are Mutual Funds and how investing in it can really help an individual in the long run?
Mutual funds are an investment fund managed by the professionals that pools money from different investors in order to purchase the securities. It is done under the scheme which is managed by an Asset Management Company (AMC). The professional assigned by the AMC, as per the market movements manages the investment portfolio in order to create wealth for the investors.
4. Real Estate
The real estate plays a major role in future. If you buy a property now, make sure you see the location of it and what is going to come into picture in and around that property. Based on this, the value of your property or the rent you can fetch will be decided.
In good old days, people use to start saving in the form of gold jewellery from the day they have a girl child. But today the situation has changed, it’s not only for girl child but for the overall development of the family and also as a major asset to be kept in mortgage in an emergency. Investing in gold in the form of jewellery/ or several schemes by different jewellers can prove fruitful in future.