The foundation of all financial planning is not about how much you earn – it’s about how much you invest. Investments not only help secure your money for the future but set a foundation for an added return on them. Investments can be for a short term or a long term. Long term investments are considered safer as they ensure a higher probability of ROI. Any investment for more than 5 years is typically considered a long term investment. Some of the essential long term investment schemes available in the market are as good as a godsend. They become your best friends when you are in dire need of money.
Public Provident Fund (PPF)
This comes on the top and is a proven safer investment platform. The best thing about PPF is that it is tax free. To open a PPF account, all you need to do is walk in your nearest bank or post office, fill up the form and there you go. Start filling in. The lock in period for PPF is 15 years that allows you compounded interest. However, if needed, you can withdraw your money only after six years – but with some terms and conditions. Tax benefits can be claimed for the maximum investment of 1.5 lakhs under this scheme.
Gold is Golden
Since ages, investing in gold is a part of Indian culture. And by doing so, many families have strengthened their finances for the bad times. Gold is certainly something that can be liquidated anytime of the day, which is a plus for investing in gold. Today, you have various forms of gold as opposed to only the physical form in the old days. Gold ETF and gold mutual fund are a classic example of owning a non-physical gold. Investing in gold can surely give you a handsome return. But do it only after a thorough study in gold market trends.
FDs (Fixed Deposits)
We all know about bank fixed deposit schemes. There is another called company fixed deposit scheme. These are considered better than the former as they yield higher rate of interest. These FDs are the instruments that companies leverage for the small investors to lend them money. The only requisite is when you invest in company fixed deposits, opt your investment period with caution as there is a specific lock in period. However, there is some risk involved in procuring these FDs as they are not governed by RBI.
ULIP (Unit Linked Insurance Plans)
By investing in ULIPs, your money is invested in equities. ULIP investments are expected to provide a return of nearly 7% on your investments. It also allows tax benefits under Section 80C, that implies, your actual return is higher than you get. Tax deduction can be claimed on maximum of 1.5 lakhs of investment under this scheme.
Mutual Funds
If you are attracted to bonds and equities, this is your go-to place. Investing in mutual funds create an equilibrium between your returns and the risk. Gone are the days when people only invested in individual stocks. Today mutual funds allow you to distribute your investments with safety margins among an array of stocks.
Mutual funds are considered a relatively safer measure to enter the equity market. You can do that through Systematic Investment Plans (SIP). SIPs allow you to invest in mutual funds for long term duration with higher returns over a period of time.
Remember, there no guarantees of ROIs in many investment products, but those are the products that can potentially give you unexpectedly high returns. Don’t fear losses. If you research upon your investment products thoroughly, you will very likely come out with flying colors. To minimize your risk, do invest in different plans and be patient. All will be well!
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