Adulthood – It’s that phase of life when you are young and raring to go for investment. You are just out of the cocoon, ready to explore the world and take the challenges head-on. Till now all your requirements, personal as well as financial were being taken care of by your parents. Saving and investing money was never on your mind.
However, now that you are independent, you need to take charge of your life and make important decisions regarding the future. Here, saving and investment of your hard-earned money should top your priority list. Starting early can prove to be a major advantage as you have enough time to fill your coffers to fulfill your responsibilities in the near future.
How To Start Investing At A Young Age?
Here’s a list of investment ideas that can help you in saving comfortably without any financial crunches:
1. Fixed Deposits (FD)
FD is the most sought after and safest investment option; park your money and forget about it for a stipulated period. At the end of the tenor, you will be able to earn a significant amount on your investment. Hence, fixed deposit provides great flexibility, with assured returns and high stability. Once you decide to invest in fixed deposit, the onus of choosing the right lender lies on you.
Many banks and financial companies provide competitive fixed deposit interest rates. The higher rate of interest you select, the better amount you earn at the end of tenor. Moreover, you have the liberty to choose the tenor – 12 months to 60 months – according to your needs.
Make sure you understand everything about investment and about maximizing the returns on your FDs. Also, you can avail other benefits like choosing the frequency of interest payout or calculating the maturity amount with the help of FD calculator.
2. Recurring Deposits (RD)
Recurring deposit is a great investment option for a salaried person. It is designed keeping in mind people with regular incomes, who can deposit a fixed amount every month to their recurring deposit account, as saving. The special kind of term deposit helps in earning interest at the same rate as the fixed deposit.
Hence, if you are a salaried employee, you deposit a pre-decided amount in your RD account and gain a corpus fund at the end of tenor. You, as an investor, are likely to earn consistent returns as the rate of interest is not based on the market fluctuations.
3. Life Insurance
If you are single, married or planning to start a family soon, life insurance is one investment option you should consider. Although it’s not an investment option, as a beginner one can consider such plans which are the mixture of savings + insurance so that they can start with investing money. This does not only work an investment option but also provide financial security to your loved ones during unforeseen circumstances.
Along with affordable plans, customization according to your needs, life insurance provides the flexible premium payment option – monthly, quarterly, half-yearly or yearly – according to your capability. In addition, you also get tax benefit on the premium amount you pay and the policy returns.
4. Systematic Investment Plan
Since it is your first trial at investment, you may not be eager to invest more money. Don’t you worry; you can begin with as little as Rs.500. Yes! As a beginner, you can invest a small amount and start with SIP. Regular contributions towards the SIP will help you inculcate a habit of saving and investing in a more systematic way, hence the name – Systematic Investment Planning.
Once you figure out your financial goal, you can start investing more amounts. The tenor of SIP can be as small as six months. However, if you want to avail tax deductions under Section 80 CC, you need to invest minimum up to 3 years.
Author Bio: Ankit Srivastava is a Google Certified Sr. Digital Marketing Strategist, Professional Blogger and Entrepreneur from New Delhi. He has already written many articles and blogs on various topics. Visit his blog: http://www.indiaataglance.com/