invest fund smartly

6 Ways To Invest Your Funds Smartly

All of us want to earn high returns without putting our invested amount at any risk. However, it is not always possible as the investment instruments that provide high returns are usually linked to the market. As a result, you might lose the invested money in case of market fluctuations or economic crisis.  

As a smart investor, you should look forward to instruments that provide the flexibility of investment and assure high returns. Moreover, you should also expect to adjust the growing inflation while ensuring maximum stability for your invested amount.  

Here are some investment instruments that will not only help you to diversify your investment portfolio but will also help to grow your savings steadily.  

 

PPF

  • Public Provident Fund i.e. PPF is one of the safest investment avenues since it is backed by the government. Moreover, it offers a high-interest rate that is reviewed every three months.  
  • Currently, the interest rate of PPF is revised to 7.10%, and the interest accumulated by the invested amount is compounded every year. Moreover, its interest earnings are tax-free.
  • It has a maturity period of 15 years which means that it is only suitable when you are planning for long term investments.

 

Bank FDs

  • Bank fixed deposits provide a fixed return as the interest rates offered on them remain fixed throughout the tenor. Also, they will help you diversify your investment profile in a risk-free way.
  • The interest rates offered on the bank FDs can range anywhere between 4 to 6.5% depending on the type of FD plan and bank you choose.

 

Corporate FDs

  • Corporate FDs provide stable returns and flexibility of investment. Also, the liquidity options are hassle-free and interest rates are better if you compare them with traditional bank FDs.
  • NBFCs like Bajaj Finance are offering FD interest rates up to 7.85% which is one of the best FD interest rates in 2020. You can invest in these FDs with a minimum amount of Rs. 25,000.
  • The FD tenor can be set between 12 and 60 months as per your convenience and after checking the exact returns with the help of an FD maturity calculator.
  • Facilities like online application process, collateral-free loans, and provision of opening multiple FDs with a single cheque make it one of the smartest investment options for you.

 

Systematic Deposit Plan

  • SDP is a deposit plan introduced by Bajaj Finance that provides all the benefits of fixed deposit albeit in a different way. If you do not want to invest all your savings in one go then you can choose their SDP i.e. Systematic Deposit Plan as it allows you to start depositing with as less as Rs. 5000 every month.
  • Each deposit will be considered as a separate FD and you can lock it for a period between 12 to 60 months. Also, the number of deposits can be between 6 and 48 as per your convenience. As your FDs mature, you start earnings returns even without investing in huge capital.  

 

Debt Mutual Funds

  • A debt mutual fund is a type of mutual fund that is less volatile than equity funds. This is because your invested capital is further invested in instruments that provide fixed income and are stable such as corporate debt securities, government-backed bonds, etc.  
  • These funds will prove to be a good option if you are looking for an instrument that provides high returns with lower volatility.

 

Sovereign Gold Bonds

  • Investing in gold is beneficial as its prices are always increasing at a steady pace. However, instead of investing in physical gold, you can purchase SGB as it eliminates the cost and risk linked with its storage.
  • These bonds mature only after a tenor of 8 years but since they are offered by RBI they are safe and trustable. These bonds are in the denomination of 1 gram of gold.
  • You can purchase bonds of worth 1 gram and at the most bonds worth 4 kilograms of gold can be purchased. An interest of 2.5% is applicable on them. The accumulated interest earnings are paid every six months but the entire value of the bonds can be encashed only after 5 years or after completion of the tenor.

It is important to maintain a diverse investment portfolio to earn inflation-adjusted returns without taking too many risks. For that, it is important to include a corporate FD in your investment portfolio as it guarantees high returns while ensuring the safety and stability of your invested capital. This way, you can hedge the risks of other market-linked investments in your portfolio.

If you do not want to deposit a huge lump sum in a regular FD plan, then you can opt for the Systematic Deposit Plan (SDP) introduced by Bajaj Finance. SDP is also a smart investment option as it provides the benefits of FD and allows you to grow your savings even by depositing a small amount every month, starting at just Rs. 5000.

Laddering deposits maximization of returns

Laddering feature allows you to invest in multiple FDs with varying maturity periods and interest payment frequencies. It works on the principle of maximization of returns due to averaging out of interest rate fluctuation in the long term. Another advantage of laddering is that you can prematurely break a standalone FD instead of the entire corpus.

Monthly Fixed Deposits

If you have started a new job or have limited income, you should look for a time deposit scheme that gives you an option of making small monthly deposits. This will grow your savings in a disciplined manner with minimal effort. Bajaj Finance FD offers a unique feature called Systematic Deposit Plan (SDP) where you can invest as low as Rs. 5000 every month for 12 months to 60 months.

Loan Against Fixed Deposit

Premature withdrawals on FD can be done only after the completion of the lock-in period. So, invest in a scheme that gives you up to 75% of the loan of the FD value anytime during the tenor. This will also save you loss of interest.

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