Investing your hard-earned money can be a daunting task, especially if you are a novice. A quick internet search can overwhelm you with numerous schemes and products and leave you confused.
To help fix your problem, we have listed five safe investment options. Scroll down to learn more:
Fixed deposits
Easily the safest and simplest, you can start here. Fixed deposits offer much higher interest rates than regular savings accounts. They have a lock-in period ranging from 7 days to 10 years. Withdrawing funds before maturity, will result in a certain amount of penalty – usually 0.5 percent to 1 percent – being charged by the bank. Some banks, however, allow premature withdrawals with zero penalty.
All banks and NBFC’s offer FDs and to invest in one, all you need to do is quickly compare the latest interest rates offered by the leading banks and then simply go to the bank’s website and open an FD account.
If you are a senior citizen, you can enjoy a slightly higher rate. There’s also a tax-saver FD covered under section 80C of the Income Tax Act that lets you invest up to Rs.150000 a year and enjoy tax savings. It has a lock-in period of 5 years.
Public provident fund
Backed by the government, it’s the second-best option for you. Returns are guaranteed and the amount invested is also deducted from taxable income of up to Re.1 lakh. But the icing on the cake is tax free returns. Can it get any better?
Annually, you can invest Rs500 to Rs.1.50 lakh. You can either invest the whole amount at one go or in over 12 instalments in a year. This makes it an ideal choice for those without a fixed source of income. The rate of interest on your investment is reset every quarter by the government in line with market rates. The current interest rate is 7.10 percent.
The lock-in period of 15 years is a bit of a dampener but the idea is to let you create a corpus for your retirement. Besides, you can always partially withdraw the funds after completion of 6 years. You can also take out a loan against your PPF account between the 3rd and 5th year.
You can open a PPF account in any Post Office in India and also in public banks and designated private banks.
Mutual funds
Stock markets are notoriously volatile. You bet right, you multiply your money. Yet, sometimes, even your best bet can go wrong wiping out every penny you invested. Overall, it’s a risky proposition and the pandemic has made it even more so.
But that shouldn’t stop you from trying it out. Mutual funds allow you to reap the benefits of the market while avoiding the downsides. They do so by reducing risk through diversification – a process in which your money is invested in various proportions between stocks, bonds and fixed deposits of different companies. When stock prices rise, you make a profit. When the market corrects itself, the bonds and fixed deposits in your portfolio will you get some fixed returns.
Experienced fund managers take care of your money, which means you needn’t have a finger on the pulse of the market. They charge a brokerage fee for it and you also have to pay capital gains tax on your profits.
There are a range of funds available in the market today. Depending upon your risk appetite, you just have to pick one. The stock heavy ones are risky but can almost double your money. The less risky ones are more into bonds and fixed deposits but guarantee you a certain return. There are also purely equity funds and debt funds.
Some funds, such as ELSS (Equity Linked Saving Schemes) allow you to save on tax.
SIPs
Systematic investment funds or SIPs offer an easier way of investing in the markets. A type of mutual fund, it lets you invest a small amount every month – it could be as less Rs.500 though most funds require a minimum of Rs.1000 investment.
This has many advantages. First, you don’t need to have a substantial saving (when you invest in mutual funds, you put in a lump sum at once). A fixed amount is debited from your bank account at regular intervals to be invested in SIPs.
Investment in SIPs is for one year minimum. If you wish to discontinue at any point, you simply need to inform 15 days prior to the payout. Your SIP will be discontinued and you can withdraw the money whenever you want. This flexibility, enables you to stem losses whenever the market is going down.
National pension scheme
Saving for retirement starts from the moment you start earning. Every month you not just set aside a certain amount but also invest it in various schemes to build a corpus for your retirement.
The government-backed national pension scheme, as the name suggests, is meant just for that. It offers various pension solutions and you can choose one to suit your requirement. For instance, you can choose to invest in equity, bonds, government securities and others, depending upon your preference. You can also let your funds be invested automatically in different assets.
Since it’s a pension scheme, the sum matures only when you reach your retirement age of 60. The accumulated interest is tax free. If you choose to withdraw the whole of it, then 40 percent of the maturity proceeds are tax free. If you opt to get it in the form of a pension post maturity, the amount will be taxed like regular income.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
