INVESTOPEDIA

Investing is not a get rich-quick scheme, but rather its a way to grow your wealth you already have. Its not necessary that you should have a lot of money to start investing rather you can do small investment which in turn changed into biggest investment in your old age.

 

“Investing is like shopping at a garage sale”-  

Phil’s Town.

 

When deciding where to invest, you would have plenty of options like-

 

1) The Stock Market-

The most common place to invest money is Stock Market. When we buy shares of company, which seems profitable; then we own a small portion of company; for which company pay dividend at a fixed percentage.

 

After that we can also sell the shares later and can increase our money.

 

2) Investment Bonds-

Bonds are typically considered “less risky” than stock, but its return is low as compared to shares.

Bonds purchasing is like giving loan to either a company or the government, for which they pay a fixed interest over the durating of bond.

 

3) Mutual Funds-

Mutual Fund is a type of investment which is managed by a professional fund manager for a small fee. This manager choose profitable securities and invest the money of investors in various securities.It is a type of fund which invest not only in single securities but a basket of securities by which the risk & investment is diversified of investors.

These funds are quite less risky; so its a better place to invest and also there is tax exemption under Sec 80(C) of Income Tax Act.

 

4) Saving Account-

It is a least risky way to save money in Bank Saving account and collect interest. But thetre is a disadvantage as it provide low returns as usually the case-” Low Risk Low Return”.

 

And also if the interest received is more than Rs. 10,000 in a year then you have to pay tax under Sec.80 TTA of Income Tax Act. But still, Saving Account play a significant role in emergency  situations.

 

 

5) Fixed Deposit-

Fixed Deposit (FDs) are one of the safest instrument for investment. This is because FDs are viewed as a place to park money with the objective of preserving the capital. Also investment in FD gives you assured return.

There is also a benefit of tax exemption under Sec.80(C) of Income Tax Act, if you invest in FD for a period of 5 years.

 

6) Physical Commodities-

Physical commodities means to invest in gold, silver or in some properties. Its better to invest in this when you have a significant amount. It will help you in future or also helpful in hard situations.