Saving your money is always a good idea – be it for emergencies, for your child’s education, for buying a house or any other thing. This is what makes it so important to invest and start saving mindfully. It gives you financial security which can help you achieve goals without compromising your day to day expenses and can get you out of a financial pinch should the need arise. This fallback money is also what allows us to take certain risks, financially, like growing a business or even starting a new one. Financial security is basically a safety net that gives peace of mind and allows us to judge worst-case scenarios calmly.
So, yes, savings are important. But it is also important for you to understand the best ways and means to get your savings to an amount that you are comfortable with. Depending on your situation and when you want your savings to be available to you there can be various saving schemes that are suitable for you. Be it a fixed deposit for long term savings where you are not in any immediate financial fix or something like a mutual fund investment where you want to invest your money, but also have it available to you as and when you need it. Here are some of the best schemes you can invest in right now to get the most out of your savings investment.
Mutual Funds (MF)
Mutual Funds are a great way to kick start your savings – they give you benefits from debt and equity and the risk v/s reward can be adjusted according to your preference. There are also tax saving options available with mutual funds. If you have a continuous revenue stream, mutual fund investments are a great way to supplement your income and grow your savings. You can invest in a SIP (Systematic Investment Plan) where you invest in small installments monthly. Remember that mutual funds, while safer than stock market trading, are still affected by the market. So, invest cognizant and protect your investment when you feel a market downturn coming.
Fixed Deposits (FD)
Fixed Deposits are the safest and the most hassle-free investment scheme available. All you have to do is deposit money for a fixed period of time and you get a fixed rate of interest on your money. The time period for investment is as low as 7 days and can for as long as 10 years. If you need the money before the investment period is over, you need to pay a penalty to free your money from the fixed deposit. Banks usually offer fixed deposit rates upwards from 7%. You can set up payouts of the interest gained on your investment based on your financial needs. Senior citizens get higher interest rates making fixed deposits ideal for retirement planning.
Kisan Vikas Patra (KVP)
Kisan Vikas Patra is a long term savings scheme that is available in the form of certificates. The aim of this scheme is to double your investment in a given amount of time (124 months currently). This scheme can be availed at the post office or any public sector bank. The minimum investment is Rs 1000 and there is no maximum limit. Certificates you purchase can be encashed after 30 months of issue. These certificates can be bought individually or jointly and are transferable all across India. The current interest rate is 6.9% but is subject to revision quarterly by the finance ministry. This is another great low-risk savings option that guarantees returns.
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