What is investment? | investment options | top 5 Best investment options with High returns | how to risk appetite affects your investment choices? | best investment options in India

 

investment

 Investment options

first of all we understand, what is investment?

Investment word when comes on your mind then just think to pay of amount which is stying for some times. As well as some times, some days, some months, or some year that’s depends on you.

 

Top 5 Best investment options with High returns

Investing is an essential part of wealth creation, which helps you beat inflation to fulfill your financial goals and stabilise your financial future. Instead of letting money lie idle in your and accounts, you can invest in different avenues like[1] stocks,[2] equities,[3] mutual funds,[4] fixed deposit,[5] or more.

 The investment avenues you must be choose, depend on your investment goals, liquidity needs, investment horizon and risk appetite. Out of these, risk apperire is a major factor to consider, especially in today’s ties, to help you decide the right option, here’s a rundown on the best investments for you based on your risk appetite.

How to risk appetite affects your investment choices?

Mostly investments carry a certain level of risk and volatility, which also affects the returns. Usually, returns in an investment are more, when the levels of risk are high, however, there is high risk of losses in such investments.

Thus, investment decisions are often taken on the basis of investor’s risk appetite, and we can claddify investments based on different risk levels. Here’s a look at different investments, based in different risk levels.

Less risk investments

In which investment low risk, seeking little to no volatility in their investment portfolios, look for low risk investment options. Ofter that deposit and government savings schemes fall under these investment categories, and suit the needs of low risk investors. And fixed-income instruments like bonds, debentures all are the low risk investments scheme.

Mainly low investment are not added to the stock market movenents and you meet them financiers, however the returns on these instruments are usually assured, and you may need to lick in your investment for a long time to earn substantial returns in these investment avenues.

Medium-risk investments

Investors looking for a mid level of risk, but relatively higher returns as compared to fixed investment options, these are invstments that ma have a certain level of risk but the returns in these investments are also higher. Debt funds, balanced mutual funds, and index fnds fall in this category.

As well as instruments carry an element of debt and stability, but the volatilities associated with their returns may also lead to losses in principal amount. Due to te irregularities in earnings on these instruments, getting a regular fixed income from these instruments is not possible.

High risk investments

For market savvy investors woth a deeper inderstanding of securities, and a high tolerace for risk, these high risk investments work best. In these investments, there is no limit to the gains, but the level o risk is also very high. Volatile investment instruments like stocks, equity mutual funds, and derivatives gall in this category.

The return on these instruments can give huge returns, but it is important to know when to put your money in a volatile environment, and know when to stop and pull out your money with high returns. The quantity and timing of returns in these instruments are not fixed.

Best investment options in India

Regardless of your risk appetite, it is important to choose the right instrumrnts to grow your savings. To help plan where t invest, here’s a look at the top 10 investment instruments chosen by investors in India.

·         Stocks:

·         Fixed Deposit:

·         Mutual funds:

·         Senior citizen savings scheme:

·         Public provident fund:

 

 

 

Stocks

A Stocks is a toe of security that signifies proportionate ownership In the issuing corporation. This entitles the stockholder to that proportion of the corporation’s asserts and earning.

Sticks are bought and sold predominantly on stock exchanges, though there can be private sales as well, and are the foundation of nearly every portfolio these transactions have to comfor to government regulations which are meant to protect investors from Fraudulent  practices. Historically, they have outperformed most other over the long run. These investments van be purchased from most online stock brokers.

Fixed deposit

A fixed deposit is a financial instrument provided by the banks and NBFCs. It is a type of investment with a higher rate of interest than a regular savings account. It provides high ROI after the given maturity date. It gives the assurance of getting a fixed return in investment.

It may or may not require the creation of a separate account.so it is easy to invest. Most of the lenders even give the facility of investing through online process. This saves the time and effort of the investors.

You can do a comparative study among all the banks and NBFCs to find the best lender in the market. This will help you to get the higher interest rate offered by the lender. The higher will be the interest rate, the higher will be your ROI. I would recommend you to invest in fixed deposit with an NBFCs and through online application procedure. This will save you time and effort and will benefit you in all possible ways.

Mutual fund

Mutual funds are financial products built to provide good returns to the investors and eventually create wealth.

The money is collected from various investors and an experienced person would invest the money in various stocks and debt instruments.

For example, equity mutual funds will invest in equities and debt mutual funds will invest in debt instruments like bonds. Balanced and hybrid mutual funds will invest in both equities and bonds.

Equity based mutual fund funds funds are further divided into various categories. For example, one of the categorizations is on the basis of company market capitalizations is on the basis of company market capitalization into large cap, mid cap, small cap, multi cap, etc. debt funds are divided into short term debt fund, long term debt fund ultra sort term debt fund, liquid fund, etc.

Each category of mutual fund has a different risk vs return profile. For example, equity mutual fund but the risk is also high. Risk is in terms of volatile returns.

Senior citizen savings scheme

Senior citizen savings scheme is ine of the best investment plans for senior citizens, especially those who are above the age of sixty. The investments are made with correspondence with government aided banks, and hence the scheme is pretty much reliable.

 

   Documents needed

1.    KYC form

2.    Photograph

3.    PAN AND Aadhar card

4.    Age and address proof

5.    Duly filled the application form

 

   Features of SCSS

1.    The maximum tenure is for five years, which can be again extended to three years.

2.    The interest rate charged in 9.3% and is payable only on dates of March31, June 30, September 30,and December 31.

3.    The principal is deposited once in multiples of 1000 INR.

4.    It is a transferable account.

5.    For premature closure, the citizen will have to sell 1.5% of the principal in the first year and 1% in the second year.

6.    If the interest accumulates and exceeds 1000 INR, then the TDS will be deducated.

   Eligibility criteria

1.    The citizen must be an Indian citizen and of the minimum age of 60.

2.    For retired defence personnel, the age should be 50.

3.    NRIs and the HUFs aren’t allowed to invest in Senior Citizen Savings Scheme.

   Benefits

1.    Multiple accounts

2.    Reliable and secured

3.    Easily availed scheme

4.    Flexible term

5.    High investment returns

6.    Flexible principal deposit

7.    Minimum document required

Public provident fund

Public provident fund (PPF) interest rate, determined by the central government in a quarterly basis currently stands at 7.10%per annum

Public provident fund – also known as PPF – is a popular investment avenue with decent returns coupled with income tax benefits. PPF account  holders can invest a maximum of INR1.5 lakh each financial year. Also, they need to deposit a minimum of INR500 in a financial year to keep the account active. A ppf account comes with a maturity period for 15 years, which means your investment is locked in for this period.

Deposits can be made in lump sum or in 12 instalments.   PPF deposits qualify for dedication from taxable income under section 80C of the income Tax Act. In uerms of income tax implications, PPF qualifies for the EEE tax category, which means an investor Is not liable to pay tax at all three levels- investment, earning and withdrawal.

Here are five benefits of PPf account you should be awarded of:

1.    The tate of interest for PPF is determined by the central government on quarterly basis. At present it is 7.10% annum.

2.    Partial withdrawal from PPF account is allowed every year from seventh year from the year of opening account. The maximum withdrawal amount allowed is capped at 50% of the balance at the end of the fourth yeat immediately preceding the year of eithdeawal or the amount at the end of the p receding year, whichever is lower.

3.    The original maturity period of a PPF account is 15 years and it can be extended in blocks of five years.

4.    The PPF account can be transferred to other bank or another branch of the bank or post offices and vice versa upon request by the subscriber.

5.    A PPF account can be continued after maturity, with or without making further contributions.

 

Thanks for reading……