Women are recklessly safe with their savings, according to a recent survey by Scripbox, which provides online financial services. The report stated that almost 58 per cent of women prefer to put their savings in fixed income investment instruments. For instance, FDs, RDs, PPF, or they just let it lie in their savings accounts. While 15 per cent chose mutual funds to invest their excess income, 6 per cent chose to buy gold.
There are multiple options to chose from for investment today. From FDs, gold to equity mutual funds, real estate, PPF, and NPS. Experts, however, say a mix of all such investment options should be chosen to create a balanced portfolio, depending on the investor’s need.
While choosing the place to invest in, don’t go randomly picking investment instruments. Understand and depending on your need, chose which one to pick. While schemes like the National Pension Scheme (NPS) and the Public Provident Fund (PPF) are risk-free, other investment avenues like the mutual funds and stock markets are subject to market risk. Hence, investing in such schemes requires knowledge or expert help. Also note that the choice of investment instruments is dependent on the investor’s risk profile, age along with various other factors.
Before zeroing in on these popular investments, know how they differ:
Known to offer the best returns, however, comes with the maximum risk. Only those with the proper knowledge of the market should take a chance in stock markets experts suggest. Others wanting to invest in this avenue should take the help of experts. Investments in the stock market can be made from small, mid-cap to large-cap stocks. Stock market returns are also taxed friendly to investors up to Rs 1 lakh, after which 10 per cent is taxed on the basis of long-term capital gains.
Mutual funds investments are known to generate higher income over a period of time, as compared to investment options like FDs, PPF, NPS, etc. Investments in MF is further invested in market instruments, equities, and bonds. The risk profile, of mutual funds, actually depends on the funds you chose to invest in. For instance, while investing in equity funds is high risk, comparatively debt funds invite less risk and are suitable for risk-averse investors. Hence, equity mutual funds are suggested for investors who can take the risk. According to industry experts, the best way is systematic investment plans (SIP) or a lump sum, for investing in mutual funds.
Real Estate Investment
For the long-term, investment in real estate is an ideal option, but those who have the spare money for it. While investing in real estate, one should have a clear idea about the type of property they want to invest in, for instance, there is residential real estate, commercial real estate, and land. It is also important to find out the most demanded locations for realty investment in India. After the Real Estate Regulation and Development Act (RERA) came into practice in 2016, in the last few years the industry has become well regulated.
investment in gold and gold schemes is one of the most popular investment avenues in India. Unlike older times when gold was only bought physically, now you can invest in gold either through gold ETF (exchange-traded fund), a gold deposit scheme, gold bars, or gold mutual funds. Gold is also easily available in the form of digital gold in online platforms like Paytm.
The report by Scripbox also stated that almost 44 per cent of the women said they want easy access when they save or invest their money. In that case investment in gold mutual funds and ETFs are a highly liquid investment. They let investors hold the gold in a paperless form and sell them easily.
Bank fixed deposits
Bank fixed deposit is a good investment option for a short duration. The popularity of fixed deposits is because of its fixed returns. For one year, FDs are known to give the highest rate of interest. Investors cannot break a tax saving FD that is locked in for a period of 5 years. However, investors can make a premature FD withdrawal with an interest deduction.
National Pension Scheme
Investors with a low-risk appetite should opt for the National Pension Scheme. This Government sponsored scheme is one of the best modes of investment, but for those with a very low-risk profile. The risk of one’s investment is cut off as it is backed by the Government. NPS also gives its investors additional tax benefits under Section 80CCD.
Public Provident Fund
PPF is a great investment option for long-term investment, and also comes with guaranteed returns that are fully exempted from tax. PPF has a lock-in of 15 years which enables investors to earn higher interest on their investments. With 5 years slab after the maturity of 15 years, one can also extend one’s investment time frame. The minimum and minimum amount to invest in PPF in a fiscal year are set at Rs 500 and Rs 1.5 lakh respectively. Investors can also opt for a loan on the balance of his/her PPF account, in any financial emergencies.