Individuals should start planning for Investment once they start earning money either in Job or through
business. Starting early helps in securing financial freedom over a period of time.
How to go about investing.
There are different kinds of investment which are Risk and Risk free investments.
In Risk free investments, Returns are very low and grow slowly over a period of time. Some of them may
not even cover the inflations increases year on year.
Some of the Examples of risk free investments are as follows
Fixed Deposit: The current FD Rates ranges between 6.25%- 6.7% for > 1 year investments. The
headwind on this investment is that it is fully taxable and if the individual is in 30% tax bracket, the net
return is only 4% post taxes. The tailwind – It provides immediate liquidity, can be used for emergency
requirements and for any other purposes of short term in nature.
Provident Fund/ PPF: PPF returns are at 8% and are of tax free in nature. The interest portion grows in
compounding effect. It is considered a very safe and secure investment. This however has high maturity
period of 15 years for PPF and for PF it can be withdrawn after 5 years. Amount received at maturity is
tax free.
Gold/ Silver: Considered to be a very safe investment and always provides good compounding returns
over a period of time.
Life Insurance: Life insurance investments can be linked to an individual goals ranging from retirement
funds, child plans, education plans , investment for marriages, annuity plans, term insurance, ULIP plans
which is linked to market. These are very good investments and generally individuals normally
investment in 5-7 policies in their life cycle. Amount invested in new policy up to 5 Lakhs/ annum/ pan
card is tax free.