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Track portfolio from the latest MF statement in your inbox automatically! There are umpteen investment options available in India. In this article, we try to list most of them and indicate their advantages and disadvantages for the investors. Public provident fund PPF was started in to promote savings culture across India. In PPF an investor should invest for a period of 15 years. After 15 years renewal can be done in a block of 5 years during which investments are optional.
Deposits can be made via cash, cheque or online transfers. Any amount deposited above Rs. Deposits can be one time or installments with a maximum limit of 12 installments per year. Fixed deposits can be done at any bank in India. The interest rate varies according to the tenure of the deposit, bank, and category. Even though a term is declared initially the liquidity is high as premature withdrawals are permitted.
NPS was launched in for government employees and later in this was extended to all citizens of India with age 18 to There are 2 accounts allocated one is mandatory Tier 1 and an optional Tier 2 account.
Investments under Tire 1 account have a lock-in period till your retirement. Investments and account opening can be done either online or offline mode. There are 3 categories of funds into which the investments are allocated. These are similar to mutual funds with passive management. They are similar to bank FDs but are usually offered with a better rate of interest. NSCs are a form of fixed deposits issued by post offices. The term can be between 5 years to 10 years. Mode of holding can be single or joint unlike in PPF where joint holding is not allowed.
The scheme comes under ETE where interest earned is alone taxable. There is no maximum limit on the value of the investment. Senior citizens saving scheme is designed for citizens above 60 years. Premature closure is allowed after one year on deduction of an amount equal to 1. Both these schemes are exempted from 80C limits of income tax. Investing in stock markets can be done through any of the stockbrokers registered with SEBI.
In order to invest, you need to open a DEMAT account and trading account by submitting the application form with ID, Address proof, and a passport size photograph. They are similar to stock markets for long-term investments. Real-estate industry is one of the fast growing unorganized sectors in India. Investment return depends on the area of investments.
In India, gold is the most preferred traditional class of investment. Gold can be purchased either physically in form of coins, bars, and ornaments. Also, digital gold can be bought through Gold mutual funds, Sovereign gold bonds and other e-gold vendors like paytm.
However based on research taking into inflation Gold investments with its volatility and risk into consideration they generate returns that are far lesser than equities. Debt Mutual Funds are funds that invest in debt securities like Treasury Bills, Government Securities, Corporate Bonds, Money Market instruments and other debt securities of different time horizons. There are various categories of debt mutual funds based on where they invest and investment horizon.
Here is the list of debt mutual fund categories. Ultra short-term funds — These funds invest in securities with maturity up to 1 year. Ideally suitable for investors who would like to get better returns than liquid funds with investment duration up to 1 year.
Short-term funds — These funds invest in securities with maturity from 1 year to 3 years. These are ideally suitable for investors with low-risk appetite with horizon up to 3 years. Dynamic bond funds — These are actively managed funds that invest in all debt category securities.
Ideally for investors who want to benefit from interest rate movements. Credit-opportunities funds invest in corporate debentures and bonds having low credit ratings to generate higher returns.
Short-term and medium- and long-term gilt funds — These funds Invest in govt securities only. These funds are prone to interest rate risk higher the maturity dates higher the risk. Fixed-maturity plans FMPs — They are similar to bank FDs and they invest in debt instruments with maturity less than or equal to the maturity date of the scheme.
These funds can be considered as an effective alternative to fixed deposits and recurring deposits as they have potential to generate higher returns than conventional fixed deposits. Equity mutual funds are funds that invest mostly in stocks.
These are the ideal vehicle for investment for investors who possess less knowledge on stock markets and investing. In case of direct equity investor may lose money due to concentration but in equity mutual funds due to diversification and fund management. Here is a broad list of different type of equity mutual funds. ELSS funds are funds that were created with the intention to promote equity investments in India by providing them tax exemption under section 80C.
They work similar to diversified mutual funds but they have a lock-in period of 3 years. This is suitable for any type of investors as these are actively managed by fund managers. There are many investment options available, choose one according to your risk profile and time horizon. Mutual funds offer an option for every risk appetite and time horizon. Your email address will not be published. Skip to content Track portfolio from the latest MF statement in your inbox automatically!
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