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Best Investment Options That Can Boost Your Income

It is useful to put aside some of your income as savings. But while saving money is a good habit, it is wise to invest your surplus cash to generate an extra amount as interest or dividends.

Here are eight best investment options to invest your money and avoid devaluation due to inflation:

Savings Accounts

A savings account will give you dismal interest rates of 2% to 4%. However, if you intend to use the money over a short term of a few months, the interest factor doesn’t matter. Therefore, maintaining second savings account for putting some money aside for expenses like school or college fees makes sense.

Fixed Deposits

A fixed deposit is among the most stable investment options existing in India today. You get a higher interest rate, typically 4.5% to 6.5%, depending on the bank that provides it. Most of the people want to invest in fixed deposit because there are many benefits of fixed deposit like – It helps investor to grow savings and get a higher rate of interest. It is a low risk investment. There are two types of FD – short term and long term. Long term investment provides a higher rate of interest instead of short term. That’s why people want to invest in long term. it also provides good interest rates for senior citizen.

You can get better rates if you invest in a fixed deposit from a non-banking financial corporation (NBFC). This is because the interest rate of a fixed deposit is fixed when opening the account, and it is not affected by market fluctuations.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

This government scheme is open to senior citizens who are 60 or older. You get a guaranteed return of 7.4% per annum. You can contribute monthly, quarterly, half-yearly, or annually. The minimum monthly contribution is ₹1,000 the maximum is ₹9,250.

Public Provident Fund (PPF)

The tenor of this government scheme is 15 years, smoothing against market volatility. You get a guaranteed, tax-free return on maturity. PPF is a good investment option for private employees or self-employed persons who do not get a pension. The current interest rate for PPF is 7.10%, better than some of the best FD rates in India.

Short-Term and Ultra-short-term Funds

This investment plan is a modified debt fund, but the maturity period is longer and can range from 90 days to three years. The longer tenor protects your investment from dips in interest rates. These funds are useful to those with a higher tax slab, but unlike fixed deposits, are adversely affected by market volatility.

Equity Mutual Funds

Equity mutual funds are regulated by the Securities and Exchange Board of India (SEBI). The percentage of assets is a minimum of 65% as fixed by SEBI. You are offered different investment options, and the risk factor varies depending on your investment option. You can get more than the best FD rates in India by investing in equity mutual funds.

Treasury Bills

The government raises money by issuing treasury bills. With this investment option, in effect, you lend money to the government. The tenor of a treasury bill can be between 91 days to 364 days.

The current interest rate for treasury bills is 3.39% (91 days) and 3.69% (364 days). You have to invest in multiples of ₹25,000, and the income from treasury bills is taxable as per capital gain rules.

Gold

You can invest in gold either in the physical form, exchange-traded funds, or sovereign gold bonds. The highest interest rates come from sovereign gold bonds, and the interest is tax-free.

With the steep rise in the value of gold, it is a sound investment because not even the worst market crash will see an appreciable decline in gold prices.

Documents Required for Fixed Deposit:

There are two types of document required for Fixed deposit – Individual fixed deposit and Non-individual fixed deposit. Documents Required for Individual Fixed Deposit:-

Following are the documents required for opening an individual fixed deposit with PNB Housing Finance Limited:

  • One latest passport size photograph
  • Self- attested copy of PAN card
  • Self-attested copy of proof of address such as Aadhaar card, Voter ID card etc.
  • Documents Required for Non-Individual Fixed deposit
  • Various types of organizations can open a non-individual fixed deposit with PNB Housing Finance Limited, such as:
  • Trusts, Associations and Clubs
  • Public/Private Ltd. Company, Co-operative Societies, Co-operative Banks
  • Partnership Firm

Following are the documents required for non-individual fixed deposit:-

  • Trusts/Associations/Clubs:
  • Trust Deed
  • Registration Certificate
  • Copy of Resolution of Investment
  • Trust’s PAN Card Copy
  • Trust’s Address Proof
  • Specimen signatures of authorized persons
  • Photograph, PAN Card, address proof of signing authorities
  • Public/Private Ltd. Company, Co-operative Societies, Co-operative Banks:
  • Copy of Memorandum & Articles of Association/Bye-laws
  • Copy of Resolution of Investment
  • Specimen signatures of authorized persons
  • Photograph, PAN Card, address proof of signing authorities
  • Partnership Firm:
  • Declaration of partnership by partners
  • Name and address of partners
  • Specimen signatures
  • PAN Card copy of the firm

Conclusion

Investing your spare cash is a good idea. The investment options featured here range from low-risk and medium-risk to high-risk. Spread your investments over the different risk categories to keep your money safe and multiplying, providing a financially secure future to you and your family.

Also, read:

Dos and Don’ts of Applying for a Loan against Property (LAP)