There are a lot of reasons why people choose to invest their surplus money. Some do it for the financial security whereas some do it so they can have the money to purchase whatever it is they want to. So if you have some surplus money or if you have recently got a raise, how will you choose to spend this money will you invest it or would you rather use it to buy something that you wanted.
It is a common belief that you need to work a lot in order to save a lot of money. But that’s not the truth. You need to think wisely and invest your money at the right time to get profitable returns.
Here are a few ways in which you can invest and expect profitable returns:
- Public Provident Fund (PPF):
This is a safe and secure long-term investment product in India. No tax is levied on this type of investment. You can open a PPF account with a bank or a post-office and the money that you invest will be locked in for a term of 15-years. During this time, you keep earning compound from this account. You also have the option to extend the term by 5 years. The only catch about having a PPF account is that you cannot withdraw any money for the first 6 years. In case you are in a dire need of money, you can take a loan against your PPF account.
- Fixed Deposits:
Fixed deposits are the easiest way and a commonly preferred mode to save some funds in India. Fixed deposits are measured as a safer option as opposed to the stock market and mutual funds. Term deposits can be of two types: fixed deposits and recurring deposits.
Fixed deposits are a onetime investment option where you will devote all your funds at a single time. If you opt for recurring deposits, you will have to invest your funds regularly over a period of time. The procedure of the fixed deposit is very easy and it is considered extremely secure.
- Company Fixed Deposits:
There are a lot of financial institutions and companies that provide fixed deposits for investors. Companies who provide fixed deposit is overseen by proper procedures under the section of 58A of the companies act. If you choose to have a company fixed deposit, you will be offered a higher rate of interest than bank deposits. A company’s fixed deposit is believed to be an unsafe option as opposed to the bank deposits.
- Real estate investment:
Real estate is fast becoming one of the top sectors in India. If you have surplus money that you want to invest, you can invest in real estate. A real estate is a good option when it comes to investing for a long term. The real estate prices change every 6 months in India and even if you invest for a year or two, you will definitely get good returns. But you also need to keep in mind that the real estate market can be affected by various things like the recent demonetization drive in India.
- Gold investments:
Investing in gold is probably the most preferred option after investing in fixed deposits. The price at which gold is sold will never go down and even if it does, it rises quickly. There are various options like Gold mutual funds, gold bar, gold deposit schemes in gold investment. Gold investments benefit in short as well as long run.
- Share market:
Even though this is an extremely risky and volatile investment option, a lot of people still choose to invest their funds in share market. Before you invest in share market it is necessary that you have complete knowledge about stocks and that you take an expert advice before investing.