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Investment amplifies the supply of funds, and the quantity of assets available to an economy, which is a critical factor of its productiveness. Investment thus assists economic expansion.
Once we decide to alter/switch our spending ways, it marks us for a better future. Investing in a scheme or placing our life savings away is extremely vital. It serves to add up surplus value to our existing financial standing.
The Investment processes can be summarised in 5 fundamental stages:
- Setting up an index of goals;
- Budding the critical and tactical asset distribution;
- Foreman study, assortment and composition;
- Portfolio execution; and
- Constant observation and due industriousness.
Top 8 Best types of investment in 2021
There are two categories that investment commodity falls into and they are: Financial and Non-Financial Capital. The former can be further divided into trade-bound products (like stocks and mutual fund) and firm profit products (like Public Provident Fund, bank fixed deposits). The latter relates to material gold and land.
Let’s have a look at top 8 investment channel which Indians look at amid saving for monetary goals.
- Direct Equity
Investiture in stocks might not be everyone’s forte as it’s an unstable asset class and there is no assurance of returns/payoffs. Moreover, not only is it tricky to pick the right fund, but scheduling our entry and way out is also difficult. The gamble to lose a substantial part or even all of our resource is high until one select stop-loss approach to diminish losses. To lower the risk of definite extent, one could alter across sectors and market commercialisation. For those who wants to invest directly in equity, go and get your demat account opened now.
- Equity mutual funds
Equity mutual fund designs largely invest in equity stocks. These schemes are classified according to market-stake or the zones in which they invest. They are also characterised by whether or not they are national (investing in stocks of only Indian companies) or global (investing in stocks of foreign companies).
- Debt mutual funds
These schemes are suited for investors who want stable returns. They are less erratic and, therefore, deemed less perilous in comparison to equity funds. These funds chiefly invest in fixed-interest producing securities like company bonds, government guarantees, investment, business paper and several other capital market tools.
- National Pension System
NPS is a long, durable and lasting retirement- centered investment product handled and controlled by the PFRDA (Pension Fund Regulatory and Development Authority). It is a blend of equity, fixed deposits, corporate securities, liquid capital and governance funds, among others.
- Public Provident Fund (PPF)
Considering PPF has a long-winded tenancy of 15 years, the influence of combining of tax-free interest is vast, specifically in the future. Moreover, since the interest gained and the principal invested is favoured by sovereign assurance, which eventually builds it as a secure investment. Please note that the interest value on PPF is examined every quarter by the authority.
- Bank Fixed Deposit (FD)
This is considered to be a relatively safer option for investing in India. Underneath the deposit security and credit guarantee assurance (DICGC) rules, per investor in a bank is guaranteed up to a peak of Rs 5 lakh, effective from February 4, 2020, which includes both principal and interest volume. The average prevailing FD rate in India, as of 2021 is 5.5%.
- Real Estate
The shelter (house) that we dwell in should at no time be taken as an investment but for self-ingestion. If in case we do not plan to live in it, then the next possession which we buy can be considered as an investment. Investments in this scheme will provide returns in 2 ways – asset recognition and lease. Compared to other assets, this is highly nonsalable.
- Pradhan Mantri Vaya Vandana Yojana (PMVVY)
This scheme is for senior citizens aged 60 years and above to offer them a guaranteed return of 7.4% (p.a.). It also offers pension income which can be paid as opted: monthly, quarterly, half-yearly or yearly. The minimal pension amount is Rs 1,000 (p/m) and maximal of Rs 9,250 (p/m). The greatest amount that can be invested is Rs 15 lakh. The tenancy of the scheme is 10 years. This is available till March 31, 2023. Once it attains maturity, the investment amount is remunerated to the senior citizen.
