Money Matters : Advice to save smart and early
It’s always good to start saving early but it’s only past 30 that you realise that you need to save money. I have myself started very late after procrastinating for quite a few years. I always believed in living at the moment than saving money for the future. I have realised that I have been able to save money without changing my lifestyle. I still do the things I like to do but since I treat my savings like utility bills I am able to save now. See, I am not trying to give any gyaan but I am writing this because somewhere someone like me might start saving. I have much more confidence in taking decisions in my life now then when my savings were nil.
I will try to be as simple as possible with little or no technical details as I am not an expert. I will just share my recent tryst with financial matters. To start my saving the first thing I did was look into the various saving opportunities. I am listing a few:
Post office Saving Schemes:
It is perhaps the best investment or saving scheme. Schemes like Post Office 5 Yr Recurring Deposit have as interest rate of 7.1% per annum (quarterly compounded). On maturity INR 10/- account fetches INR 721.23.
Public Provident Fund:
The Public Provident Fund (PPF) Scheme, 1968 is a tax-free savings avenue that was introduced by the Ministry of Finance (MoF) in India in the year 1968. Interest earned on deposits in the PPF account are not taxable. Deposits made towards PPF accounts can be claimed as tax deductions. This makes the PPF Scheme one of the most tax efficient instruments in India. It was launched to encourage savings among Indians in general, especially to encourage them to create a retirement corpus.The interest rate is revised every quarter. Presently, the interest rate is 7.8% per annum (compounded yearly). PPF accounts can be opened at any nationalised, authorised bank and authorised branches / post offices. PPF accounts can be opened at specific private banks as well. These accounts can be opened by filling out the required forms, submitting the relevant documents and depositing the minimum pay-in at such branches/offices that have been authorised for the same.A PPF account may be maintained with a minimum of Rs. 500 and it can be a maximum of Rs. 1,50,000 per year. Deposits can be made in lump-sum or in 12 installments. Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on.
People who want to invest in equities and bond with a balance of risk and return generally choose to invest in mutual funds. Nowadays investing in stock markets through a mutual fund is a market trend. One of the best investment options in India is a mutual fund for a long time by systematic investment plan. This investment plan will definitely give a much better return compared to any other investment option in the market.
Direct Equity or Share Trading :
Make sure you know how to analyze a share stock before going to buy direct equity or share. It is the best amongst the list of top best investment options in India for the long period of time. If the investment is for a long time, for example, more than 15 years, it is somewhat sure that there will be higher return. One of the ways to invest is to understand the sustainability of the business of the company in the long run.
Real Estate prices always go high and the returns but if you are someone who cannot afford Real Estates, go for Direct Equity and buy Housing Finance, Infrastructure or Cement Company stocks. This are more likely to have an upward trend.
There are many other options but I am yet to explore them. I have other stories as why I chose a particular investment scheme but I will save it for some other day.