In order to build a strong financial backbone, you can invest your money in the right financial manner. However, not every investment will guarantee substantial returns. Nevertheless, if you invest wisely for a good amount of time, the potential to gain healthy returns is much higher.
And, in case you are a salaried person, you are bound to manage investments and the expenses within a particular income. However, a salaried person must consider the amount of risk and the returns for choosing the best investment option.
If you are looking for a safe investment option, here are the best investment options for a salaried person.
Invest in Fixed Deposit: When it comes to safe investment option, most people choose fixed deposit as their retirement investment options. It helps money to get deposited with banks for a fixed maturity period that ranges from 15 days to five years or even above.
It also allows you to earn a higher rate of interest when compared to other conventional savings account. However, during maturity, the investor will receive a return that will be equal to the principal and towards the interest earned throughout a fixed deposit.
When it comes to fixed deposits, bank fixed deposits are one of the best short term investment options they offer to secure investments. Many banks provide a better interest rate on fixed deposit. It ranges from 3 percent to 7 percent per annum. The investors can also park their money for a minimum period of seven to 10 years.
Invest in Recurring Deposit: A recurring deposit is more than an investment cum savings option that will help you when you want to save regularly over a certain period and earn a higher interest rate. Every month a fixed amount of money is deducted from either the savings account or a current account.
However, at the end of the maturity period, the investors are paid back invested funds with an accrued interest. In a public sector bank, a recurring deposit account can be opened within a minimum amount of less than INR.100.
Although, when it comes to a private sector bank a minimum amount to be deposited must be INR 500 to INR 1000. But in a post office, you can easily open an account at just INR 10. The interest rate will vary from one bank to another.
It generally ranges from 7 percent to 9.25 percent per annum. And, in the post office, it is 7.4 percent which also depends upon prevailing market conditions. However, senior citizens acquire an extra 0.5 percent.
Invest in Systematic Investment Plan: When it comes to the systematic investment plan, salaried people will consider investing in an equity-oriented product. When you are investing in equity funds, you must ensure to take a systematic manner. For example, you should put in a fixed amount of money every month rather than putting the money all at once.
However, with equity funds, you must diversify investments as per risks and return expectations. But a salaried person must stay invested for a longer duration to earn good returns.
Invest in Public Provident Fund: A public provident fund is India’s most popular long-term investment options. As the government of India backs it up, it is a safe investment with an attractive interest rate.
It also offers tax benefits under section 80c of income tax 1961, and the interest income is exempted from tax. A public provident fund generally comes with a maturity period of 15 years.
Although it can also be extended within a year of maturity for five years or more. The annual deposits are a minimum of INR 500 to a minimum of INR 1.5 lakhs can be efficiently invested in a public provident fund.
Invest in National Pension Scheme: When you invest in a new pension scheme, it is based on gaining popularity in India as it is one of the best retirement investment options. It is open to all, but it is also mandatory for all government employees.
The investor can also deposit a minimum of INR 500 per month or INR 6000 yearly, making it even more convenient for all Indian citizens. In addition, an investor can also consider a national pension scheme as a good choice for their retirement planning as there is no direct tax exemption during the times of withdrawal as the amount is tax-free as per the Tax act of 1961.
It is a scheme that is a risk-free investment as the government backs it up.
Invest in Gold: Many Indian investors often look for investing in gold. It is also one of the long-term investment options. When you invest in gold, it is also used as an inflation hedge.
However, investing in gold can be quickly done by purchasing physical gold, gold deposit schemes, gold mutual funds, gold bars or even gold ETF.
Now that you know the best investment options for a salaried person, you can choose the best investment option for you. Not every salaried person would invest in the future. It is the age where a salaried person should make prudent decisions and secure their future financially.
When you invest early, life insurance will guarantee money, or the wealth that grows with time and offers security.