(Newswire.net — July 18, 2019) — Investment is one tool that strengthens you financially for your future expenses and it works as a wonder if you are a salaried employee. So, the financial advisors always suggest investing according to your salary. There are many options for investment available and you may get confused in selecting the best investment options for you. Even though the investment instruments depend on the risk profile of a person and some other factors, there are some investment options that are good for almost all salaried professionals to start their journey towards the accumulation of corpus.
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Mutual Funds: Probably one of the investment options for salaried people or working professionals is mutual funds. Among different types of mutual funds, equity mutual funds are very popular among people who earn on a salaried basis. The earning potential of equity mutual funds is as high as some of the best performing mutual funds have accumulated an average growth return of approximately 20% in one decade. However, a point to be noted here is that with high returns high risk as well comes. It is suggested to consult your financial expert before taking any decision for your mutual fund. Investing in mutual funds is not difficult, and you can start investing through a Systematic Investment Plan (SIP) with a small amount as Rs.500 per month.
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Public Provident Fund: One of the risk-free investment instruments for salaried individuals is Public Provident Fund or PPF. Moreover, it is very easy to start investing in PPF and is simple for even those who are not well-versed with the internet. You can open your PPF account in a post office or in the bank. A PPF account is quite similar to the recurring deposit of bank but with tenure of 15 years. You can extend it further by five years. For salaried people, it is the easiest and best ways to invest every month in PPF. Even the facility of loan against PPF is also provided and you can as well make early withdrawals of your PPF amount after completing seven years. Another interesting fact of PPF is the interest earned over the amount invested towards it is free of tax.
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National Pension Scheme: The National Pension Scheme or NPS is a pension scheme sponsored by the Government. This investment scheme is again suitable for those who have a low-risk profile. Despite the contributions you made towards NPS, you get a specific pension amount. In addition to this, investing in NPS gives you tax benefits u/s 80CCD (1B), this deduction is on the top of the other deductions you can be benefiting u/s 80CCC, 80C, and 80CCD, wherein you can save as much as Rs.1.5Lakhs annually. Through NPS you can save an additional Rs.50, 000 u/s 80CCD(1B).
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Investment in the Stock Market: Another good investment option for salaried personals is investing in the stock market. You can watch the performance of your stocks in real time as well. Investing in stocks is one of the tax-friendly ways of investments, but it taxes for long-term capital gains. If you do not want to invest a huge amount in the stock market, then also you can invest in it as the stock market offers various large, mid, and small cap stocks.
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Investment in Real Estate: Investing in real estate is, in fact, the best option for long term investors. RERA which is Real Estate Regulation and Development Act, which is being practiced since 2016, is boosting the real estate market more aggressively. Now the real estate industry has become safe and well regulated for the sellers and buyers. In addition to this, the easy availability of home loans is also removing various barriers and allowing buyers to save a significant amount from the income tax per year against the home loan payment.
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Bank Fixed Deposits: Again a good investment option if your goal of the investment is short term like three years. The bank FDs or fixed deposits provide fixed returns over the tenure of investment and pay returns bi-annually, annually, or monthly as per the policy of the bank.
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Gold Investment: You can invest in gold in three forms – Exchange-Trade Funds, Physical Form, and Sovereign Gold Bonds. In EFTs or Exchange, Trade Funds of gold are basically mutual funds, wherein every unit represents gold’s 1gm. This can be either in electronic or physical form. Physical form means you are purchasing gold physically, but in this case, you need to have a PAN card. The sovereign gold binds provide a high-interest rate without much risk or hassle that you may encounter while investing in the physical form of gold. You do not have to pay taxes after you redeem these bonds.
The Final Words: The investment options mentioned above have been shortlisted after market research. On one hand, where the schemes such as PPF and NPS are free of risk, others like the stock market and mutual funds have market risks and you must invest in them after discussing with some financial advisor.