It is a very common misconception in India that you need some amount of extra cash in order to save money for the future. In reality, having a proper saving and investment plan, what is known as budget, is actually what will help you with your future needs. Lets look at some.
Bank Fixed Deposits (FD)
Fixed Deposit or FD is the most preferred investment option today. It yields up to 8.5% annual return depending on the Bank and period. Minimum period is 30 days and maximum is 5 years and above. Senior citizens get special interest rates for Fixed Deposits. This is considered to be a safe investment because all banks operated under the guidelines of Reserve Bank of India.
National Saving Certificate (NSC)
NSC is also backed by Govt. of India so it is a safe investment method. Lock in period is 6 years. Minimum amount is Rs100 and no upper limit. You get 8% interest calculated twice a year. NSC comes under Section 80C so you will get an income tax deduction up to Rs 1, 00,000.
Public Provident Fund (PPF)
PPF is another form of investment backed by Govt. of India. Minimum amount is Rs500 and maximum is Rs70, 000 in a financial year. A PPF account can be opened in a head post office, GPO and selected branches of nationalized banks. PPF also comes under Section 80C so individuals could avail income tax deduction up to Rs 1,00,000.Lock in period for PPF is 15 years and interest rate is 8%. Unlike NSC, PPF interest rate is calculated annually.
Insurance
Insurance is among the best investment option because this provides you the facility to insure your life, property and money as well as provides better and risk free return. There are various investment options available in the market but insurance is more secured option. Insurance Companies are providing various options with affordable premium.
Stock Market
Investing in share market is another investment option to get more returns. But share market investment is volatile to market conditions. In India, the Bombay Stock Exchange (BSE) is the most powerful and largest trading centre. The exchange includes numerous smaller exchanges with recognition of regional parity. So it is better to have some knowledge on the Indian economy and the BSE before effectively investing in Indian Stock Market.
Mutual Funds If you are considering investing in stock market and are afraid of its somewhat unpredictable fluctuations, you can definitely consider investing in mutual funds. Some of the reasons that go strongly in favour of mutual funds are their lowest risk factors owing to diversification of assets in to various sectors and instruments within. As with the risk, the costs of unit share too are spread across making them affordable by almost any one.
Gold
India (Non-Resident Indians included) goes crazy when it comes to gold jewellery. Gold has proved itself time and again to be the perfect hedge for inflation. It fares poorly when compared to real estate or shares when compared on the basis of real inflation adjusted returns. Any serious investor, however, is advised to have a certain percentage of investment in gold to hedge inflation.
Real Estate
Real Estate Investment in India has been one of most successful investment phenomenon in the last few decades. Real Estate industry in India has reached a culmination point ever since, the gates were opened to the foreign investors. Real Estate Investment in India is not only a bright prospect, but also, from a magnified dimension, it is a potential opportunity to optimize the benefits of the economic growth in India.
