With inflation rates hitting 3.05% in May 2019, the need for smart savings and investments is as its peak. In such a scenario, it is vital for every single individual to consider financial tools which can help generate returns irrespective of negative market fluidity and sentiment.
Investments are divided into 3 categories – high-risk investments, middle-risk investments and low-risk investments.
Depending on such investment options, here are some money saving tips that you can consider to build a corpus against the temporary financial turmoil and mediate investments for the future.
- Recurring Deposits – A type of term deposit offered by financial institutions, allows you to invest a pre-determined amount every month for a fixed tenor ranging between 6 months and 10 years at an attractive recurring interest rate that ranges between 5% and 7.85%. Some of the advantages owing to which it is considered as one of the best money saving tips are –
- You can avail loans against recurring deposits.
- Senior citizens can enjoy additional interest rate.
- Premature withdrawal is allowed.
- National Pension System – Individuals between 18 years and 60 years can have an NPS account. It is a type of long term investment plan and the accounts mature after the investor hits 60 years of age which can be further extended to 70 years.
Some of the advantages of the NPS scheme owing to which it is one of the best schemes you should invest in to plan your post-retirement life are –
- You can conveniently apply online at NSDL.
- Deposit in different assets such as Government bonds, equity, corporate bonds.
- Partial withdrawal of up to 25% after 3 years from date of investment.
- Prolonged lock-in to help you save better.
- Fixed Deposits – You can invest in fixed deposits from leading NBFCs like Bajaj Finance that offers a competitive interest rate of up to 8.70% for a tenor ranging between 12 months and 60 months making it both a short and long-term investment option. These investments plans do not depend on the volatile market, owing to which the returns are guaranteed and you can use calculators to estimate your returns before investing.
Some of the advantages of such type of money saving tips are –
- The minimum deposit amount is as low as Rs. 25,000 so that you can start your investment any time.
- You can avail a loan against your fixed deposit.
- The returns are stable and assured.
- Senior citizens can enjoy higher interest rates.
- You get to enjoy auto-renewal, multi deposit, and online application process facility.
- Senior Citizen’s Saving Scheme – Also known an SCSS, it is one of the safest plans for individuals above 60 years. Individuals above the mentioned age can invest a maximum amount of Rs. 15 Lakh in multiples of 1000.
Owing to the advantages given below, SCSS is considered as one of the top investments schemes for senior citizens to ensure financial stability, such as –
- The application process is fast and convenient.
- Returns offered are safe and guaranteed.
- Tax deduction under Section 80C can be claimed of up to Rs. 1.5 Lakh.
- Post Office Monthly Income Scheme (POMIS) – Considered as one of the best short term investment plans POMIS offers guaranteed returns that are not based on market conditions. The current interest rate is fixed at 7.3% per year which is subject to changes under specific circumstances. The returns are guaranteed, and you can estimate the total return based on the interest rate you invest in.
- Debt Funds – These are a type of mutual funds but hold a comparatively lesser risk of financial loss. The amount is invested in secured financial instruments such as corporate bonds, Government securities, etc. to offer better returns. The tenor of such investments ranges between 1 day and 15 years. The returns are generated via portfolio valuation change or interest income. There are several types of debt funds, such as –
- Liquid fund.
- Low duration fund.
- Overnight fund.
- Money market fund.
- Medium duration fund.
- Dynamic bond fund.
- Short duration fund.
- Long duration fund.
- Corporate bond fund.
- Floater fund.
- Gilt fund.
- Medium to long-duration fund.
- Ultra-short duration fund.
Apart from the above, other savings scheme includes mutual funds, Public Provident Funds, Mutual funds, stocks, real estate, gold, insurance plans, RBI taxable bonds, etc.
While you invest in any of the financial instruments mentioned above, analyse your financial stability and your requirement to ensure that you do not stop your investments mid-way and also that you benefit the most out of your deposits.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory