Making the right investments is bound to reap dividends in the future and will ensure your financial prosperity despite inflation. Investments are an excellent option to safeguard your purchasing power. Choosing the right investment avenues is bound to provide both short-term and long-term benefits. Having said that, there are both safe and lucrative options available for investors as per their financial capacity and needs. Investment moguls like Warren Buffet have made a fortune just by making the right investments. Of course, this requires a considerable amount of different skills, but there are safer options available for apprehensive customers which will offer guaranteed returns at little to no risk. Thanks to the plethora of investment options available to customers today, everyone can reap the financial benefits of investment.

Let’s consider the various advantages of investing through the subsequent points:

 

• Beating inflation: The volatile nature of global currencies can seriously threaten the financial status of many people. It’s a well-known fact that wage/salary growth and inflation rates have been disproportionate for decades. Historically, the average global rate of inflation has been approximately 3% every year. This means not investing can actually make you lose a lot of money and you certainly don’t want that to happen. Making risk-free investments can yield at least 7% return annually, which can not only make you richer, but also counter inflation effectively.
• Build wealth: Saving money is the prime financial goal of most people not only in India, but also internationally. The only way you can build your wealth is by investing in something. Even the richest of the rich invest so that they can stay ahead of the game.
• Early retirement: Many people dream about retiring early to pursue their hobbies or to tick things off their bucket lists. If you let money sit in your savings account, then it’ll not multiply at the expected rate. Making more investments will help you make a lot of money because of compound interest. This means you can avail interest on the already availed interest, thus increasing your wealth exponentially.
• Tax benefits: Most investment options in India offer tax benefits, which can be availed under Section 80C. This is like a cherry added on top of the cake to make the deal even sweeter for you. Therefore, consider making such tax saving investments today.
• Meeting financial goals: There are many unforeseen expenses as well as anticipated ones that can be heavy on your pocket. Hence, it’s vital to keep aside some funds for a rainy day. However, this should not deter you from sending your children to the best of schools and colleges. That’s why investment is certainly something that’ll help you lead a worry-free life.

Here are some investment options that you should definitely consider:

Fixed Deposits

Perhaps the safest form of investment, this facility is bound to provide you with assured returns. Fixed deposits are perfect for people who have a very limited investment budget and can’t afford to take any risks. If you seek complete safety, then the best option would be to invest in a fixed deposit account issued by any public sector bank.

If you’re willing to take certain risks, then consider investing in fixed deposit accounts offered by private sector banks and entities. This can give you higher returns as compared to investing in public sector banks. According to many experts, fixed deposits are an excellent short-term investment option. It insulates investors against market crashes while offering competitive returns, thus rendering it a viable prospect. No surprises as to why this is among the best investment options in India.

Liquid Funds

Liquid funds’ dividend option is appropriate for people who fall in the high income tax slab of 30 percent and above. It’s a variant of mutual fund scheme that’ll let you invest in options that mature within 90 days. In 2018, liquid funds had given customers absolute returns of 1.7 percent for the months May, June and July. By selecting this investment facility, you can purchase and sell units at a short notice.

There is also not much risk involved even if you invest a lot of money as the focus of this instrument is on capital retention and liquidity. This makes it possible for you to receive substantially more returns as compared to your bank savings account. Liquid funds are an excellent, lucrative short-term investment option with certain amount of interest risks involved.

ULIPs

A Unit-Linked Insurance Plan is a comprehensive insurance-cum-investment plan that fulfils all your financial needs. It works similar to a life insurance policy – you pay your insurance provider a fixed premium for a predefined number of years (also known as the premium paying term). Part of it goes towards providing your loved ones with a life insurance cover. The rest gets invested in the fund options you choose. A ULIP plan allows you to switch between different fund options so that you can enhance your fund value based on market performance. ULIPs provide tax benefits under Section 80C, where premium payment up to Rs 1,50,000 is exempt from taxation. Additionally, your maturity benefit is also tax-free under Section 10(10D). However, it only applies if the Sum Assured in your life insurance policy is at least ten times the annual premium amount.

These are some of the investment options for you to ponder on. It’s recommended that you clearly define your financial goals before embarking on any kind of investment. This will help you select the best investment option, which will thereby assist you to accomplish your monetary dreams.