Grow Your Money

Time to read: 3 mins | November 20, 2017

When it comes to investments, what most prudent investors want is for their investments to be secure and at the same time, earn reasonable returns. Investors however, broadly fall into two categories – conservative or risk-averse investors who are more concerned on the safety/security of their investment, and aggressive investors: those who are willing to take a risk to get higher returns. To narrow down upon the investment profile you fit, you need to determine your risk appetite, as well as your investment tenure. Once you’ve identified your investor profile, you need to understand the different types of investments you can choose to diversify your portfolio with.

Bank fixed deposits

While the returns are taxable for any amount exceeding Rs. 10,000 per financial year as per the prevalent tax slabs, FDs offer stability to your portfolio. Eligible individuals can submit Forms 15G or H (as applicable) to ensure that no tax is deducted at source. You can also avail of recurring deposits, a type of fixed deposit, wherein you invest a fixed amount each month, and get the principal together with accrued interest at the end of the tenure.

Public Provident Fund (PPF)

A convenient option with a low minimum investment amount of Rs. 500 per financial year, a PPF account is unique in its offering of tax deduction under Section 80C of the Income Tax Act, 1961, wherein the principal, interest and withdrawal amount (on maturity) are all tax free.

Mutual funds

The simplest route by which one can invest in equities without actually dabbling in the stock market, mutual funds offer you the option to explore various asset classes through SIPs or a lump sum investment. Mutual funds also offer the added advantage of tax saving under Section 80C. You can invest online, or via your bank.

Insurance

Protecting yourself and your dependents has never been easier, as you can avail of a host of benefits when you avail of life and health insurance policies. Do keep in mind the tax benefits as well, in addition to value-add features such as disability benefits.

Equity shares

Equity shares offer possibly the best returns, especially when you stay invested over a long term horizon. However, they are also perceived to carry a high level of risk, so weigh your options carefully before you invest.

Start building your portfolio as per your needs and resources, by evaluating all available options prior to investing.