Financial security is a significant area of concern for people. People often tend to focus on saving money for emergencies and retirement and ensuring that their future will be trouble-free. But by doing so, people miss out on the entire concept of wealth generation and growth as by merely saving money they are just stacking away cash and not using it economically.
You should invest your money in investment plans smartly and not let it sit idly. However, as the financial market is extremely volatile, it can be a scary place for someone with no prior knowledge of the field. Therefore, you must keep up to date with the latest offers and schemes so that you can earn substantial and guaranteed returns.
Choosing the best investment scheme may seem overwhelming; here is a quick guide on the investments that you should consider.
Fixed Deposits are the safest investment option available to those who are unwilling to take risks by investing in schemes such as mutual funds, equity, etc. Since FD interest rates are pre-decided and predefined, FDs let you control your financial risks and help you fulfil your goals and needs and also protect you against unexpected expenses. FDs are also a smart way to build savings over time.
However, there is no liquidity in FDs so the money cannot be withdrawn till the FD matures. The FD interest rates tend to vary from 4% to 9%. FDs also offer investors various income tax and wealth tax benefits. Returns from an FD are eligible for tax deductions and are taxed according to the income bracket of the investor.
Mutual funds are market-based investment options; therefore, they offer no pre-decided rate of return. They are liquid assets and can be bought and sold quickly based upon their intrinsic value. In the long run, mutual funds yield from 11% to 15% of returns which is very high.
National Pension Saving Scheme
The National Pension Saving Scheme is a government-initiated investment scheme, which means to help the Indian Citizens get a secure life after retirement. National Pension Saving Scheme is one of the safest options for investment, and like a fixed deposit, the scheme provides the investors with a guaranteed return. National Pension Saving Scheme is looked over by the Pension Fund Regulatory and Development Authority of India (PFRDA).
There are two types of accounts, tier- 1 account and tier- 2 accounts.
- The tier- 1 account are those wherein the investors can make investments in amounts of Rs.500-Rs.1000.
- The tier- 2 accounts are those for which the minimum investment option is Rs.250.
The National Pension Saving Scheme yields a rate of interest between 8%-10%. When the scheme matures, the investors can withdraw up to 60% of the return while it is mandatory to keep the remaining 40% which is to be received as a pension.
There are lots of investment schemes out there. Some offer stability with a moderate rate of return, and others are more risque but with a higher yield. Among these varied types of schemes, you might find the one for you. However, we suggest you to not settle for one without doing prior research.