India is emerging as the fastest economy in the world. Financial experts say that investment is directly linked with the financial system of the country. So investors are always searching for rising markets where the growth rate is high. India is one such place.
There are several investment options currently available in the Indian market. The investors have short term and long term options searching alternatives for making investments. While investing money, they should wisely take decision for getting good returns.
Short Term Investment
If investors like to make short term investments, conventional approach is best option. These are Fixed Deposits, Recurring Deposits, Liquid/ Ultra Short Term Funds.
One option for short term investment is fixed Deposits. Currently, interest rates is quite high for this type of investment therefore investor may be benefitted with fixed deposit scheme. Private sector lenders such as Lakshmi Vilas Bank and Dhanlaxmi Bank are among the most popular for type of schemes.
Recurring deposits is also an option for short term investment for those who do not have more funds, but they have monthly inflows to invest at regular intervals. Bank provides high interest rates on recurring deposits as compared to savings accounts and almost similar to those on fixed deposits. These are available for 6-24 months.
Recurring deposits are beneficial for accumulating money for particular purpose such as if an individual have any travel plan and wants to spend around Rs. 50,000 or more after 6 months, can try this option to accumulate funds.
Liquid/ Ultra Short Term Funds
Liquid/ Ultra Short Term Funds is also a short term investment plan. It is a specific form of mutual funds that invest in fixed incomes including treasury bills, commercial paper, certificates of deposits, securitised debt for very short-term from 90-365 days. These funds give capital security besides liquidity and offer returns in comparison with savings bank accounts.
Long Term Investment
While making long term investment options it is recommended that investor must diversify its funds. Long term investments, can be made in stocks, bonds, mutual funds and other such options.
Before making long term investment, investor must research thoroughly the product. It is advised investor should consult various sources before investing. Investors may also surf various websites on internet, which may assist them in evaluating the companies of investment.
After investment decision is taken, it is important to watch invested schemes and compare their performance with the market index. People must choose the investment option according to the risk profile.
Among the long term investment there are various options to invest like mutual funds, life insurance, real estate, NSC, PPF and bonds. Another important factor in investment is liquidity. Investor must not select option of PPF, if money is required within 3- 4 years because PPF has minimum lock in period of 5 Years.
Investment in any category must be done with definite time perspectives. If Investors has chosen short-term schemes, good alternatives are mutual fund and Fix Deposits. If they want to invest in long term schemes, real estate and equities are good options.One need to remember investments always needs sufficient time to get good returns, so short term investing may be risky, whereas long term investments can be considered safe.
- Ragini Sinha