Wallpaper future, land, money, plant, savings images for desktop, section  разное - download

Selecting the right option:

Investing your hard-earned money is a decision which should be taken very carefully and after a well thought out plan. All the calculations should be done prior to making any decision regarding where you are going to put your money.

If you are new to investing, then it is likely you are not sure where you should invest your money. Making the wrong investment choice can lead to losses, which you wouldn’t want. Therefore, you must seriously consider a few parameters before investing.

AGE GROUP: Generally young investors have limited responsibilities and a longer investment perspective. When you have a long professional life ahead, you can invest in vehicles that are long term and keep your investments increasing as your income increases over time. That’s because equity-oriented investments are better for you than going for bank fix deposits. On the contrary, older investors can easily opt for safer investments as FDs.Recurring Deposit is another option for a safe investment that allows you to invest a small amount every month. Both FDs and RDs can earn a fixed rate of interest for a fixed period.

A public provident fund is a long-term investment instrument that comes with a lock-in period of 15 years, the interest rates are fixed by the GOVT OF INDIA. On maturity, the whole amount is tax-free in the hand s of the investor. Loans and premature withdrawals are allowed in certain conditions.

EPF is one more retirement-oriented investment that helps salaried individuals get a tax break under Section 80C of the Income-tax Act,1961. Upon maturity, the amount is totally tax-free. However, you can access your EPF investments only on meeting specific criteria and your EPF account matures only when you retire.

NPS: The National Pension Scheme is a relatively new tax-saving option. Investors stay locked in until their retirement and can get higher returns than PPF or EPF as NPF offers plan options that invest in equity as well. The maturity amount(you can withdraw only upto40%) is not totally tax-free, and a part of it has to be used to purchase an annuity that will give the investor regular pensions Govt employees are compulsorily required to subscribe to NPS.

OBJECTIVE: Your objective of investment can be long term or short term. You can opt for safer avenues for short term goals and go for high return-generating equities for long term goals. If the goal is short term you should invest in guaranteed return plans, if you can push it back for a few months, then investing in equity mutual funds and stocks is beneficial. If the market performs well, you can earn the required amount much earlier than you expected.

PERSONAL STATISTICS: While investing you must consider a few factors like how many dependents you have and how much are you earning. A young investor cannot invest in long term equities if he must take responsibility for his family despite having enough time ahead. On the contrary, someone older with no responsibility and a regular income can invest in equity for better returns.

This is the reason one size doesn’t fit all when it comes to investments.


As we only talked about FDs and equity investments, we will see what the potential risk of every investment is. The following covers it all:

InvestmentTypeReturn PotentialPotential to Beat InflationRisk Involved
Direct EquityActiveVery highVery highHigh
Mutual FundsBoth active and passiveModerately HighVery highHigh
Fixed DepositsPassiveModerately lowHighNo risk
Recurring DepositsPassiveModerately lowLowNo risk
Public Provident FundPassiveHighLowNo risk
Employees’ Provident FundPassiveHighModerately HighNo risk
National Pension SystemBoth active and passiveModerately HighModerately HighModerate

As you can see from the table above that risk potential is different in every investment, therefore you must choose very carefully depending on your needs, what is the best choice for you.

I Will talk about more investment options in my next blog.

None of the blogs or opinions expressed within are meant as advice to you or anybody else on any matter, including but not limited to, personal finance, health, or other matters of life. If you need advice, speak to a professional!

Published by Anita Vij

A caring mother of 2. A loving wife. An aspiring individual who wishes to share her life-long learnings with the rest of the world.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: