Types of Investments

Why investments?

Types of Investments in India

Where should you invest your money?

How should I plan my investments?

1. Why investments?

Investments play an important role in our life earning money is not enough. If we earn a lot of money and spend in one day that way we can not save our money. In today world investment is part of our life. We hard work to earn money to fulfill our dream and needs. If we invest in and we do not see on that investment at once that not enough for that we should do hard work as well. This is why we invest. We should invest money smartly to get a good return out of it.

2. Types of Investments in India

There are many ways to invest our money that can get a good return. There are stocks, Mutual fund, Fixed Deposits, Fixed Deposits, Recurring Deposits, Public Provident Fund. There is some long term investment that gets a good return. The Indian investor has a number of investment option to choose from. Here are some popular investment options available in India.

Stocks

Stocks, also known as company shares, are probably the most famous investment vehicle in India. When you buy a company’s stock, you buy ownership in that company that allows you to participate in the company’s growth. Stocks are offered by companies that are publicly listed on stock exchanges and can be bought by any investor. Stocks are ideal for long-term investments. But investing in stocks should not be equated to trading in the stock market, which is a speculative activity.

Patience is the key: If you can hold on to stock till the right period, it is unlikely that you will encounter a loss. However, there are several external factors can riddle profit-making prospects so you

Direct equity investment

It is considered one of the most volatile options in investing but direct equity can earn profits like no other scheme, provided investors are well-informed about the market.

While previous generations have been apprehensive about investing in direct equity, numerous youngsters are now investing in the equities in order to gain higher returns.

Although the risk involved in this market-related scheme is more than any fixed-income scheme, it can help you earn significantly on your investments if you are well-informed about day-to-day market operations.

Mutual Funds

Mutual funds are a way to invest and get a good return that is a good way of investment. Mutual funds have been around for the past few decades but they have gained popularity only in the last few years. Different types of mutual funds invest in different securities. Equity mutual funds invest primarily in stocks and equity-related instruments, while debt mutual funds invest in bonds and papers. There are also hybrid mutual funds that invest in equity as well as debt.

SIP

Systematic Investment Plan, commonly referred to as a SIP, allows you to invest regularly a fixed sum in your favorite Mutual Fund scheme/s. In SIP, a fixed amount is deducted from your savings account every month and directed towards the Mutual Fund you choose to invest in. you can start investing a small amount and get a big return. We can invest as low as RS 500

Fixed Deposits

Fixed deposits are also a way to investment are for a specific, pre-defined time period. They offer complete capital protection as well as guaranteed returns. They are ideal for conservative investors who stay away from risks. Fixed deposits are offered by banks and for different time periods. Fixed deposit interest rates change as per economic conditions and are decided by the banks themselves. Fixed deposits are typically locked-in investments, but investors are often allowed to avail loans or overdraft facilities against them. There is also a tax-saving variant of fixed deposit, which comes with a lock-in of 5 years.

Recurring Deposits

A recurring deposit (RD) is another fixed tenure investment that allows investors to put in a specific amount every month for a pre-defined period of time.

Saving money and investing it are closely connected. In order to invest money, you first have to save some up. That will take a lot less time than you think, and you can do it in very small steps.

RDs are offered by banks and post offices. The interest rates are defined by the institution offering it. An RD allows the investor to invest a small amount every month to build a corpus over a defined time period. RDs, offer capital protection as well as guaranteed returns.

Public Provident Fund

The Public Provident Fund (PPF) is a long-term tax-saving investment way that comes with a lock-in period of 15 years. Investments made in PPF can be used to earn a tax break. The PPF rate is decided by the Government of India every quarter.

The corpus withdrawn at the end of the 15-year period is completely tax-free in the hands of the investor. PPF also allows loans and partial withdrawals after certain conditions have It is an ideal risk-free option with an interest rate of 7.60 percent in 2018-19. The interest rate on PPF is determined by the government. You can only deposit 1.5 lakh in an annum so you do not even have to spend a significant amount.

The interest keeps compounding annually and credited at the end of every year. While it does not offer quick returns, it is a does provide long term stability and decent returns after a span of 15 years. You can extend the tenure further in blocks of five years after the initial lock-in period.

The National Pension Scheme (NPS), introduced in 1999, is an extremely diverse retirement plan, managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a concoction of equity, fixed deposits, corporate bonds, liquid funds, and government bonds.

Private life insurance schemes

With deeper tech penetration, the life insurance industry has played a defining role in 2018.

There is more focus on customer services and it is not merely sold as an investment instrument. In fact, more and more young women, Man are also going for private life insurance options.

In this life insurance schemes according to an insurance policy that premium money can get and some money deducted from the total amount. Health/life insurance schemes which offer a maximum cover with minimum premium payment

Term insurance plans usually offer more cover at a lesser premium than a complex insurance plan-cum-investment option.

Such health insurance policies also qualify for tax deduction under Section 80C of the Income Tax Act to the tune of Rs 1.5 lakh. Therefore, a large number of informed youngsters are choosing term health insurance plans deemed as value for money.