Investment Avenues

Investment Avenues

Let us today take a brief note on different Avenues of Investments.

Investment Avenues 1024x745 - <h2>Investment Avenues</h2>
Different Investment Avenues

Bank Fixed Deposit – It is the most common Financial Instrument but losing its glory due to the low rate of returns and that’s too are taxed or eligible for Tax Deduction at Source. Even sometimes the returns here cannot beat inflation. But it is practiced because I can say is the safest avenue for investment and highly liquid.

Public Provident Fund – PPF account can be opened with authorized branches of Post Offices/Nationalized Banks/Private banks for the tenure of 15 years. The amount can be withdrawn after the maturity of the account. However, Loan against it is available after a certain Period of time. It yields a Fixed rate of interest which is decided by the government from time to time.

National Saving Certificates – NSCs is offered by Government of India through Post Offices. It yields a fixed rate of return. Here, the interest earned is added back to the principal amount every year to generate Compounded returns. However, it lacks Liquidity as one cannot exit before maturity.

Post Office Monthly Income Schemes – As the name itself suggests this scheme is offered by Post Offices. Here, the Interest on deposit is payable monthly or quarterly as opted by the investor. It’s a better instrument for Retired or person who wants regular income. At Maturity, The Principle along with some bonus is paid back to the Investor or Nominee as the case may be.

Gold – Traditionally, it is considered an important asset class for diversification. We have already discussed Gold in one of our previously

Mutual FundsMutual fund are the Pool of Money managed by Professional Fund Managers in some Asset Management Companies. These can be further divided into various classes according to their investment Objectives and other details. Equity Linked Saving Scheme is one of the Parts of Mutual Funds. We will be discussing mutual funds in details later on in some article.

Corporate Fixed Deposits – Corporate Deposits/Non-Convertible Debentures are gaining attention due to their high rate of return as compared to Bank Fixed Deposit. But, there are some risks associated with them. One should be cautious in investing these instruments.

Direct Equity – Investing directly into shares of Listed Companies in Dematerialized/Electronic form is called Direct Equity Investment. It requires basic knowledge about the financials, working and Business Models of the Companies you are investing in. In short, it needs to be actively managed. Surely, a well managed Equity Portfolio yields a better return in the long run.

Real Estate – Investment in real estate is beneficial for long term goal planning due to the uncertainty of price in short to medium term. Also, the Tick size here is very high. Every individual may not be possibly get invested here.

One must have a blend of Financial Instruments to cater to his needs. Every Financial Instrument has its own features and limitations. Combination of Financial Instruments in particulars makes a portfolio which can serve for liquidity and Goal accomplishments.

Be Wise Keep Investing

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