To grow money always make hedge with different investment avenues based on your risk appetite.
The investment avenues available are:
- FD(Fixed Deposit)-Bank deposits they are safe but do not offer attractive interest rate. Only 5 lakh of FD is insured in bank .Interest is taxable. Tenure for investment is pre defined by investor. It offers better rate than savings account interest. There are two kind of FDs interest rate for same tenure a) Senior Citizen FD interest rate b) Regular FD interest rate. It vary slightly from bank to bank and range is from 3.25% to 8%.You shall get amount at the time of maturity. Pre closer comes with reduce in interest component so in time of need you can take loan which is offered at differential of 1 to 2 % and can repay back. For Individuals Interest earned is fully taxable, while for senior citizens claim deduction of up to ₹50,000 against interest earned is applicable.
- Debt and Equity market -You can do it by buying directly or through mutual funds. a) Debt Investment :It is made in fixed income securities mostly are in Government papers or AAA rated papers or NCD(Non Convertible Debentures).Credit worthiness is decided by rating given by rating agency Moody’s, Standard & Poor’s, Crisil, CARE. The long term capital gain tax is applicable at 20% plus indexation benefit for more than 3 years. Short term gain is taxed at investor tax base. The return varies from 6 to 9%. b) Equity Investment: It is pure buying of stocks. Can Also invest in small amount through SIP(Systemic Investment Plant).The short term capital gain is 15% irrespective of the tax bracket you fall in for those having income more than 2.5 lakh Rs. For long term capital gain above 1lakh Rs is taxable at 10% without indexation benefit. The risk is high and return can range from negative to 20% over a long period. You should invest in equities if you have a long term horizon of minimum 5 years to reap its benefit.
- Gold(Love of Indian Household)-Physical but your pay 3% GST plus need a locker to keep it safe or ETF(Exchange Traded fund)-Stored in digital formate. or Sovereign Gold Bond-Backed by Government of India an offers interest of 2.5% per annum.
- Real Estate-This is an investment if you have spare money since it is highly illiquid asset. Amongst all land is considered more liquid than commercial or residential properties. Investment in real estate is for rental income which varies from 3% to 12%. Now REIT (Real Estate Investment Trust) is also introduced in stock market. For Capital gain if you sell in less than 3 years short term capital gain is applicable at your existing income tax slab (i.e. It is added to your income).For Long term after 3 years it is 20% with indexation benefit.
- Commodities:-Buying Future and options on Exchange. This is mainly used by trader of grain market and corporates for hedging purpose.
- Currency Market:- Buying of different currency on exchange. This is also used by corporates and trader for hedging and mainly those who are in import export business.
- PPF(Public Provident Fund):This is a good investment option with 7.1% interest rate and is tax free. But can do maximum 1.5 lakh per annum. Can Claim Deduction under 80C.Lock in period of 15 years and can extend for 5 years there on.
- Senior Citizen Saving Scheme: This scheme is backed by government of Indian and is for Senior citizen. They offer quarterly payment and minimum investment of 1000 Rs to maximum of 15 lakhs . Tenure is 5 years which can be extended for 3 years. Current rate of interest is 7.4%.Can take deduction under section 80C.
- Sukanya Samriddhi Yojana: This is for girl child .Maturity is 21 years of girl child or until girl child marries after 18 years. Minimum investment is 250 Rs to maximum of 1.5lakh per annum. Current interest rate is 7.6% per annum.
- LIC and Term Plans and Ulips:-This are not investment they should be treated as insurance products.
