Investment has never been easy as it requires an individual to consider several aspects. Considering the unavoidable factors and expert advice can not only help you earn better returns but also help you accomplish your financial aims in your life.
The earlier you start investing the sooner you can create the wealth for your varied needs. There are many investment instruments available in the market. Some of them are classified as secured investment options and others into the unsecured categories of investment. The choice to invest in secure or unsecured investment avenues depends on your personal choice.
About the Safe Investing Options/Plans in India
People who do not wish to take risks can choose to park their money in fixed-income securities in India that are known to provide fixed returns and work as an additional source of income for a family. There are many ways to invest your money to enjoy a stable income. Let us here talk about the same.
You can opt for the many short-term and long-term investment plans or options based on your need for the investment. It is recommended to consider diversifying your portfolio to maximize your returns and manage efficiently the potential risks.
Below are the Top 9 Safe Ways to Invest Your Money
More About the Options to Invest Your Money
These options are known to offer relatively better features and provide competitive advantages. You need to stay alert, expand your personal understanding, and if required seek expert guidance for better investment plans and investment decisions.
Let us here discuss in brief the 6 popular and safe ways to invest your hard-earned money in India.
1. BONDS
Bonds in India are one of the popular media for government and private entities to raise funds from the market direct from the investors. Here the borrower instead of seeking a loan from banks and financial institutions get the required money from the market by issuing bonds with a minimum face value of Rs. 1000. Investors buy bonds according to their capacity and in exchange get the guarantee of return of capital termed as face value and fixed interest termed as a coupon in bonds. There are many good features and advantages that make bonds a preferred investment instrument. You can choose to buy bonds classified into different types on the basis of their features, risks, exit options, and other factors. Bonds come in fixed-income securities and are known to provide higher returns along with safety features.
Bonds are a good source for organizations and investors. For bond issuers, it is the medium to raise funds; for bondholders, it is the option to earn income with the safety of invested capital money. The popular bond types are – government bonds, corporate bonds, green bonds, zero coupon bonds, perpetual bonds, and more. It is primarily classified into secured bonds and unsecured bonds.
Today, retail investors can visit online and buy corporate bonds and other bonds online in minutes. Bondsindia.com and other online platforms offer the hassle-free option to trade in bonds.
2. Fixed Deposits (FD)
Fixed Deposits (FD) in India have been the prime choice of investors, specifically in the retail segment. Because of a lack of knowledge the familiar people, do not think beyond bank FDs. The fixed deposits are facilitated by private, public-sector banks, NBFCs like the Life Insurance Corporation of India, and other financial institutions. FDs are the preferred choice of people looking for guaranteed returns and less risk. The rate of interest varies from bank to bank. The investment amount and maturity period can be chosen based on your convenience.
Why choose fixed deposits to invest your money?
• Low investment starting with a minimum of Rs. 5000
• Low risk
• Capital protection assured up to 5 lakhs through insurance
• Guaranteed annual returns• Option to open FD in a bank or with NBFCs
• Flexibility in terms of investment amount and maturity
• Easy process and loan facility against your FD• Early exit in case of emergency
Your decision to go for investing in FDs can help you earn a fixed interest and fulfil some of your short-term financial needs.
3. Mutual Funds
Mutual funds can be a good option if you make informed decisions. It is better to educate yourself about mutual funds and then go ahead with your investments; you can also invest in them through investment companies. Investment in mutual funds is subject to market risk; hence, you need to evaluate the potential risk and reward before investing in it. Your act of responsible decision will help you reap the fruit of your investment decisions. Creating your portfolio and diversifying it can help you enjoy more advantages of returns. Whether you are going for a long-term or short-term investment, make sure you choose the right and safe ways to earn a return on your investment.
Advantages of Mutual Funds
• Convenient and low costs for investing• Professional portfolio management at a low fee
• Reduced risk through diversification
• Dividend earned reinvested for your investment growth
4. Direct Equity
In direct Equity, an investor gets companies directly from the stock market. The investor, as an equity holder of the company, receives many rights and enjoy dividend as the return on investment. Direct Equity has the potential to bring in higher returns to an investor in comparison to other investment options.
Investment options can be profitable, less risky, or risky. The important thing is to consider the critical essentials like if your interest is in the long-term or short-term, capital security, more interest, liquidity, etc. Direct Equity is suitable for those interested in long-term investment.
5. Post Office Saving Schemes
India Post in the country has made the Post Office Saving Schemes facility controlled by it. It was introduced to develop in ordinary people the habit of regular saving along with advantages like interest, return of principal, and exit options.
The easy enrolment and process make it one of the most attractive investment avenues. You can visit your nearest post office and get your investment done in the Post Office Saving Schemes. There are many saving schemes offered by the post office.
A few of the popular Saving schemes include:
• Post Office Time Deposit Account (TD)
• 5-year Recurring Deposit Account (RD)• Post Office Savings Account
• Monthly Income Scheme Account (MIS)
6. National Pension System (NPS)
Choosing the investment option yielding good returns and guaranteeing the security of the capital is not easy. It needs you to research information and seek expert advice. Your efforts will help you reap the fruit of your hardship and make the right investment choice. The National Pension System (NPS) was introduced to replace the pension schemes for employees of the State and Central governments.
This National Pension System, from May 1, 2009, onwards, was made available in India for the entire citizens. NPS investments can be made into two accounts – Tier 1 account and Tier 2 are the two accounts for citizens to go for the NPS investments. The present applicable rules have made NPS Tier 1 accounts mandatory and are known to provide tax benefits. The Tier 2 NPS account is not compulsory and does not provide the help of taxes. Some many features and advantages make NPS one of the top options for investment in 2022.
Below are the key features and advantages of the National Pension System (NPS):
• Long-term option for the investment to provide post-retirement financial security
• Flexible to choose Rs. 500 annually as the initial investment amount
• It allows choosing your preferred investment options that include Government Bonds, Equity, Debt, etc.
•. Flexibility to make a partial withdrawal in the situation of medical or any kind of financial emergency
• The advantage of multiple Tax benefits. You can avail the benefit of tax under Section 80C & Section 80 CCD (1B)
The above-detailed options will help you make an exclusive choice and invest wisely. The investment options in the market are for the different categories of users. Risk-averse investors can choose to make investments in fixed-income securities.
Always make investments considering your different needs for the assets. The financial market is volatile, so it is necessary to make intelligent investment decisions. Your decision made in haste can result in several unwanted consequences.
The Best Investment Choices – Frequently Asked Questions
1. How to select the right investment option from the many choices in the market?
No doubt, choosing the investment option is a daunting job. While you plan to go on the investment journey, consider your different goals in your life -short-term and long-term opportunities for investment, features, advantages, level of risk, liquidity, and return.
2. Name the top investment avenues available in India.
The top investment avenues available in India include Bonds, Fixed Deposits, Public Provident Funds (PPF), National Pension Scheme (NPS), Post Office Saving Scheme, Mutual Funds, Direct Equity, Unit Linked Insurance Plans (ULIP), and Liquid Funds.
3. How risky is it to invest in bonds?
Bonds are considered a safe and secure investment avenue in the fixed-income category. Unlike other options, bonds also carry certain risks. There are different risks involved that you need to consider. The interest rate risk can be minimized by investing in bonds with the issuer’s higher credit rating. The bonds with AAA ratings are deemed safe. Government bonds have minimal risk.
4. What are the advantages of investing in Bonds?
Bonds give your many advantages. You can put your idle money to work for you. It will help you earn the ROI you expect. Some bonds in the corporate category are known to offer up to 15% interest. It can be a good option for investors willing to take risks. Bonds provide the advantage of a low initial investment of Rs. 1000 face value, flexibility to exit, comparatively high-interest rate, the safety of your capital, fixed income, return at different intervals, and more.
5. Which is the best investment avenue for a higher rate of return?
Every investment avenue has its pros and cons. The investment choice should be made after considering the vital factors and your purpose behind investing. If you check the prevailing market condition, inflation, and volatility, you will find bonds the better investment avenue for a higher rate of return. Many corporate bonds in India offer coupons ranging from 8 to 15%, subject to your holding the purchased bonds until maturity.
6. Why Choose BondsIndia for the trade in bonds and other products?