It’s important to realise the importance of investing, as in today’s world, just earning isn’t enough. It’s important to invest in securities that delivers inflation-adjusted returns. An Indian investor is offered with different types of investment options to choose from. Some of these options are traditional investments that have been utilised across generations, while some are relatively newer investment options that have gained popularity in recent years. Following are some popular investment options available to investors in India:
These are financial investment vehicles that pool the money of numerous investors to invest in securities such as money market instruments, bonds, equities, etc. These funds are professionally managed by a fund manager to yield the highest possible returns on the mutual fund investment. The returns are produced according to the market performance of the fund. Investors can invest in mutual funds either via SIP (Systematic Investment Plan) or Lumpsum.
Direct investment in equities is considered as one of the most preferred long-term investment options. When investors buy stocks or shares, they become a part-owner of the company. What’s more, the risk-reward ratio for investments in equities is higher than any other form of investments. Thus, although equities are often marked as high-risk investment options, these securities have the potential to generate significant returns than other types of investment.
Did you know that India is the second-largest consumer of gold following China? People in India buy gold in various forms like gold coins, bars, jewellery, etc. However, one of the best ways to invest in gold is via Exchange Traded Funds (ETFs). Investing via ETF is the cost-efficient way to approach the bullion market. What’s more, gold ETFs offer the ultimate convenience to investors as they are quite easy to trade and store, and an investor does not have to fret about thefts. The transparency in pricing in gold ETF is another reason why you should consider investing in it.
Bank Fixed Deposit (FD)
FDs are one of the safest investment options available to an investor. A bank FD is an investment vehicle offered by banks and other NBFCs that permits investors to put their idle money in these securities to fetch a fixed rate of interest. From the ease of flexibility to various choices, bank fixed deposits are a boon to investors despite their age groups and income levels. Returns on fixed deposits are fixed and there is little to no risk of loss of capital. FDs have a lock-in period of 5 years.
Investments do not follow the concept of one size, fit all. Hence, an investor should choose an option that best suits their financial profile. Their investments should align with their financial goals, risk appetite, investment horizon, and other parameters. As an investor, you can also avail the services of an expert or a financial advisor who can suggest the best options according to your portfolio. An expert can also help you with your financial planning. Happy investing!