Top 6 Investment Options For Salaried Employees
Salaried folk should make it a point to save money from their salary at regular intervals and at an early age, so to take the benefit of the law of compounding. Starting early always helps to satisfy life’s goals, so make it a point do this early and frequently . Here are a number of best investment options that salaried individuals should consider at an early age
Systematic Investment Plans of Mutual Funds
Systematic Investment Plans of mutual funds have also generated good returns over the years. For instance, if you had put a sum of Rs 10,000 monthly in the Axis future Equity Fund over the last three years, you’d have invested Rs 3.6 lakhs, but, your corpus now would be Rs 4.9 lakhs. The fund has generated an outstanding return of 26 percent within the last 1 year and 17 percent within the last three years. Most of the equity mutual funds over the last 1, 3 and 5 years have beaten returns from fixed deposits. However, we wish to tell readers that returns aren’t certain and there is often a bent for returns to be very volatile. there’s no certainty that your returns would be protected.
Salaried people can consider Investing in an equity-oriented product. While investing in Equity Funds, one should consider taking a scientific way, i.e. one should put a certain amount of cash monthly rather than putting the cash all at once. Also, within equity funds, one should diversify investment as per risk and return expectation. Ideally, a salaried person should stay invested for an extended duration to earn good returns. Since equity funds have various categories, investors with moderate risk appetite can choose large-cap or multi-cap equity funds and investors with a high-risk appetite can invest during a mid-cap and small-cap fund. Equity investment through SIP mode reduces the danger within the future.
2. Company fixed deposits
We aren’t recommending any bank fixed deposits just because the returns on them are abysmally low at the instant . However, salaried individuals can check out company fixed deposits, which are AAA rated and offer a high amount of safety. Among these include names like Mahindra Finance, Bajaj Finance, and PNB Housing Finance. The returns on these deposits can range from 8 percent to eight .5 percent, while the yields on a three-year deposit are often as high as 9.5 percent on cumulative deposits. it is vital to recollect that company fixed deposits are often a risky investment and hence search for top quality and AAA-rated instruments. There would be a TDS that might be applicable if the interest amount exceeds Rs 5,000 in any financial year .
3. Small saving schemes of the post office
Small saving schemes of the post office are extremely safe and have a tendency to offer higher returns than bank deposits. for instance, the National Savings Scheme gives you a rate of interest of seven .9 percent and a sum of Rs 100 fetches Rs 146.25 after a period of 5 years. One also can check out time deposits, which fetch a rate of interest of 6.9 percent for 1, and three years and about 7.7 percent for five years. While the interest rates might not be the simplest, they’re still much above what banks within the country are offering. Remember, all of the post office saving schemes are very safe.
Equity shares are another good avenue for salaried investors to park their money. However, we wish to state that if you do not have the expertise, please don’t invest. you would possibly want to take the help of a professional. Remember, you’ll either seek the assistance of professional advisers if you’re able to pay the fees alternatively you can invest in mutual funds. Equity shares have over the long run generated good returns, provided one has invested cleverly with due research. Investors patiently and an extended-term holding period of 3-5 years tend to profit from equities.
5. Public Provident Fund
Public Provident Fund offers you a rate of interest that’s even above that offered by banks. It currently offers you a rate of interest of seven .9 percent, which is much above the fixed deposits of depository financial institution of India, which provides you a rate of interest of 6.25 percent on its deposits. PPF offers you tax benefits under Sec80C of the tax Act. However, beginning from the subsequent fiscal year, if you decide for assessment under the new tax regime, you’d not be entitled to Sec80C benefits. The 15-year duration of the PPF is additionally advantageous within the sense, it allows you to create a corpus over an extended period of your time. The general public Provident Fund is backed by the govt of India and is hence very safe.
Public Provident Fund (PPF) is one among the foremost popular future investment options in India. Since it’s backed by the govt of India, it’s a secure investment with a higher rate of interest. PPF comes with a maturity period of 15 years, however, it can be extended within a year of maturity for five years and more. Annual deposits of minimum INR 500 to maximum INR 1.5 lakh are often invested in the PPF account.
6.Invest in Recurring Deposits
A Recurring deposit is an investment cum savings option for those that want to save regularly over some period of time and earn a better rate of interest. Monthly, a fixed amount of money is deducted from your bank account. At the end of the maturity period, investors are paid back their invested funds with accrued interest…
At a public sector bank, an RD account is often opened with a minimum amount of as less as INR 100. While, at private sector banks the minimum amount to be deposited is INR 500 to INR 1000, whereas in a post office one can open an account at just INR 10. The rate of interest at every bank may vary, but it typically ranges between 7 percent to 9.25 percent, p.a, and at the post office it’s 7.4 percent (depending on prevailing market condition). Senior citizens get 0.5 percent extra