The present investment environment is full of opportunities. It offers a wide range of instruments and avenues to invest in. Investors are free to choose and put their money in any instrument they want. The market now provides various financial instruments engineered to meet the needs of different investors, so that people can invest their hard earned savings without any worries.
The widened investment spectrum includes the real estate, commodities, metals, bullion, money market instruments, capital market instruments among others. Investment can also made for a future date at a pre-fixed price by the way of future and forward instruments. There are options of short-term and long-term investments, depending upon an investors need. World Savings Day 2020 Date And Significance: Know The History And Celebrations Related to the Day Highlighting Importance of Savings.
The hard-earned savings should be invested after a careful analysis of the investment avenue as well as the market conditions. Here are five ways to invest your savings to get best returns :
Fixed Deposits or FDs are one of the safest investment. interest on an FD is much higher than that on a savings bank account. FDs come with a fixed lock-in period, hence they have lesser liquidity. The rate of interest varies as per the terms and conditions of the FD. Investing in a fixed deposit also attracts in tax advantages. Investments in 5-year tax-saving FDs are covered under Section 80C of the Income Tax Act, 1961, and investors can deduct up to Rs 1,50,000 a year by investing in this.
National Pension System:
The Pension Fund Regulatory and Development Authority (PFRDA) manages the National Pension System or NPS. It is a long term retirement - focused investment avenue. The minimum annual contribution to keep an NPS Tier-1 account active is Rs 1,000. Earlier this limit was Rs 6,000.It is a mix of equity, fixed deposits, corporate bonds, liquid funds and government funds, among others.
Public Provident Fund :
The Public Provident Fund or PPF is a widely popular investment instrument among people looking for long-term highly safe investment. It has a lock-in period of 15 years minimum. The interest earned on a PPF investment is interest free. The principal invested is backed by sovereign guarantee. The interest rates of PPFs are higher than those offered by the saving account deposits. The interest rate on PPF in reviewed every quarter by the government.
Recurring Deposit :
Recurring Deposit or RDs is another popular and safe investment option.It is a more flexible variant to FDS. It is available in flexible tenure options ranging from 6 months to 10 years. This investment instrument is offered by multiple banks and NBFCs and is beneficial in channelising small savings into long-term profitable investments. It provides an higher return than a savings account deposit. National Savings Day 2020: From Keeping Your Credit Card at Home to Utility Savings, Follow 6 Easy Tips to Limit Your Expenditure & Save Money for Future.
Equity-Linked Saving Scheme :
Equity-Linked Saving Scheme or ELSS has several advantages including tax shield. It is covered under Section 80C of the Income Tax Act, 1961. ELSS has a lock-in period of three years. ELSS has a record of offering high, though it carries a moderate risk. It provides the twin benefit of tax deductions and regular return.
Apart from these, investing in T-Bills, Government Bonds, Mutual Funds, Debt Funds etc, also ensures a a safe and regular returns on the investment. Inventors can invest for growth, regular returns or both. However, all the investments should be made after thoroughly going through the terms and conditions, and environment of investment.