Saving money gives you incredible financial power, including the ability to fund future goals and life’s unexpected events. But figuring out where to invest can be challenging, especially with the endless array of options.
The ideal place to save money is really a combination of factors. In this article we are going to talk about where to invest your money to get good returns in India and at the same time where there is no risk of losing money.
The Best And Safest Place To Save, Borrow And Invest Your Money
If your goal is to grow your savings with less risk, here are five places you can safely save money and earn interest.
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Before you start saving, ask yourself a few questions:
What am I saving for?
When can I need this money?
For example, let’s say you are building your emergency fund and you may need money at short notice. You will want to keep your money in an account that is easy to access and where you will not be penalized for withdrawals.
On the other hand, if you’re saving for a down payment on a house and know you’ll have a few years, you might consider a savings plan with less liquidity and a higher interest rate. Your savings strategy is your plan. The following tips can help you plan to save and maximize your interest income.
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Where To Invest Money To Get Good Returns in India
If you are wondering where to invest your money for good returns, here are some of the types of investments that you can choose from:
Start saving money with Money Club and secure your future!
Bank Fixed Deposit
The first place where you can invest your money to get good returns is bank fixed deposit. A bank fixed deposit (FD) is a popular option for investment due to its assured returns and the safety involved. Under Deposit Insurance and Credit Guarantee Corporation (DICGC) regulations, each depositor in the bank is insured for both principal and interest amounts up to a maximum of Rs 1 lakh.
As per the requirement, one can opt for monthly, quarterly, half-yearly, annual or cumulative interest options. The interest rate earned is added to one’s income and taxed as per his income slab. Currently, most banks offer interest rates between 3 per cent and 6 per cent for tenures ranging from 1 to 10 years.
Read: Alternative To Fixed Deposit: 14 Places To Invest Better Than FD
The Money Club
Another place where you can invest your money to get good returns is chit fund. In a chit fund savings scheme, a group of subscribers save a fixed amount every month. You can save money from your salary every month to invest in chit funds and easily earn 15%-20% p.a. It is a unique way to save money because the tenure or maturity period is short and the monthly contribution is small and hence easily affordable. God forbid if you are face a financial emergency, chit funds also give you a quick liquidity option to tide over the situation. You can bid to borrow a lump sum amount at affordable rates.
The Money Club is one such AI–driven digital chit fund platform where you can park your funds to get good returns. It is a safe and secure platform as it is registered under the Chit Fund Act of 1982. The best part is that the money is not kept with the organizer. The transactions are directly made to the member’s bank account. The members are verified by the company and hence no chance of fraud.
See this video to know more about Money Club
https://www.youtube.com/watch?v=fDpz78h3_Gs
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Post Office Schemes
Small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), Senior Citizen Savings Scheme, Sukanya Samriddhi etc. are also popular investment options among fixed income investments. The interest rate for small savings products is fixed by the government at the beginning of each quarter of the financial year based on the yield on government securities.
While the returns can be higher than bank deposits at times, you must link them to your goals while investing as most of them are long term products.
Investing In Gold
Returns from gold can be volatile for some time and then flat for many years. Keeping gold in the form of jewellery has its own challenges like safety and high cost. Then there are the ‘making charges’, which generally range between 6 per cent and 14 per cent of the cost of the gold (and can go up to 25 per cent in case of special designs).
There is another option for those who want to buy gold coins. A more cost-effective way to own paper gold is through Gold ETFs, where buying and selling takes place on a stock exchange (NSE or BSE) with gold as an asset. Investing in Sovereign Gold Bonds is a way of investing in paper gold.
Peer-To-Peer Lending
Another place where you can invest your money to get good returns is a peer-to-peer (P2P) platform. Similar to e-commerce websites such as Amazon and OLX, a peer-to-peer (P2P) platform is a marketplace for money lending activities.
You can lend money to others in a more organized and structured manner by using a P2P lending platform. An investor opens an account with a P2P lending platform to deposit the amount to be loaned. When an individual applies for a loan through the platform, the interest rate will depend on their financial profile. A loan seeker can review multiple offers and accept one or more offers depending on his financial needs. Hence if you have surplus funds you can invest in a peer to peer platform and earn interest passively. This is a good source of passive income.
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Ways To Save More Money After Your Monthly Expenses
Here are some interesting ways to save, invest and grow your income.
Invest In Instruments With Fixed Returns
The first rule of investing is not to park all your savings in one instrument. Therefore, you should diversify your investments to reduce the risks. For example, some invest in savings bank fixed deposits, mutual funds, government pension schemes, etc.
The idea behind this is to invest regular amounts in these investment classes over a long period of time and generate good wealth. Diversification is important because it keeps your portfolio from becoming too heavily weighted toward one company or one sector. This helps spread the risk and ensures that your investments are safe in the long run.
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Some Extra Money In Your Pocket
In the age of the Internet, earning a few extra bucks doesn’t seem too difficult. In fact, one can earn extra income from the comfort of home without much stress. You can do freelance work like content writing, website designing, digital marketing or graphic designing. Here you can work at your own pace and be your own boss. Some other ways are starting a blog, creating a YouTube channel, teaching kids, baking cakes, etc.
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Evaluate Your Spending Habits
Analyze your spending habits to understand whether some costs are unnecessary and can be cut, like credit card bills. Avoiding these expenses can save a good amount which can be directed towards investments.
Another easy way to analyze and improve your spending is to create a detailed monthly budget. Junk food and entertainment are the most popular categories that fall under unnecessary expenses.
Budget can be separated into needs and wants – ‘needs’ include essential expenses like food, electricity, rent, internet and ‘wants’ include those expenses like shopping, entertainment etc.
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Automate Your Investments And Stay Regular
When it comes to investment, regular investment is more beneficial than lump sum. In a regular investment, a specific amount has to be invested every month irrespective of the property price.
Some investment products like mutual funds have options like Systematic Investment Plan (SIP) with options to automate your investments. They deduct a certain amount from the bank every month for investing in a fund.
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Bank Fixed Deposit
Low-risk investments include securities that protect your capital while also ensuring a consistent income flow. Savings accounts, fixed deposits, National Savings Scheme (NSC), fixed maturity plans, liquid funds, and chit funds are examples of low-risk investments.
In India, there are numerous investment opportunities with high potential returns. Direct equities or equity-based mutual funds provide the highest post-tax post-inflation returns of any asset class. If you understand real estate, you could make a lot of money here as well. Another place to park your funds is The Money Club which is an online chit fund platform. Here you can earn much more than what you can earn from fixed deposits.
The best way to invest money for good returns is to identify your financial goals, such as a comfortable retirement, purchasing a home, or funding your children's higher education. After you've determined your goals, consider the time frame. Consider equity for long-term horizons. You can consider chit funds and liquid funds for a short-term horizon.
Difference Between Savings and Investment
Conclusion
In this article, we have seen where to invest money to get good returns. While saving and investing regularly may seem daunting, it’s really nothing more than a habit of sticking to a budget.
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