Many people view saving money in their bank savings accounts as investing. While it earns interest, the earnings fall far short of negating the impact of inflation over a more extended period. Currently, most banks offer savings accounts with a return of 4% or less. As a result, it becomes critical to seek out better alternatives and investment opportunities that will enable you to earn money with your money.
Listed below are easy and hassle free ways to generate more money with secure investments
Fixed-rate Bank Deposits
A bank fixed deposit is a popular investment vehicle and it is considered as the best fixed deposit in India due to its guaranteed return and inherent safety. Each depositor in a bank is insured up to a maximum of Rs 1 lakh for both principal and interest amounts under the Deposit Insurance and Credit Guarantee Corporation rules. Monthly, quarterly, half-yearly, yearly or cumulative interest options are available in fixed deposit schemes. Earned interest is added to one's income and taxed according to one's income bracket.
Fixed-rate sweep-in deposit
A sweep-in fixed deposit, also known as a money multiplier or 2-in-1 account, offers a higher yield than a savings account while maintaining the liquidity of a savings account. Sweep-in deposits convert any balance in a savings account that exceeds a specified threshold limit into an FD. While the interest rate offered may be comparable to a regular FD, some banks may not offer senior citizens an additional interest rate on sweep-in FDs.
Post office schemes
At the start of each quarter of the fiscal year, the government sets the post office FD rates on small savings products based on the yield on government securities. While the returns may occasionally be higher than bank deposits, you should invest following your long-term goals, as the majority of these products are long-term in nature. Post office fixed deposits, alternatively referred to as post office term deposits are investment vehicles offered by the Indian Postal Service. Post office FD rates do not fluctuate more as compare to the bank FD interest rates and it is considered as best investment scheme in India.
In order to earn a tax-efficient return, investors may want to consider debt mutual fund schemes since their gains are indexed after three years and taxed at 20%. These funds invest primarily in fixed-income securities such as corporate bonds, government securities, treasury bills, commercial paper, and other money market instruments.
Currently, the 1-, 3-, and 5-year market returns for medium duration bond funds are approximately 7%, 8.5%, and 9%, respectively. According to the most recent Sebi categorization rules, debt fund schemes are classified into 16 categories. The investor should select the appropriate category of systems based on the duration of the underlying securities.
Gold returns can be volatile before becoming stable over several years. The 1-, 3-, and 5-year market returns are around 10%, 5%, and 2.7 percent, respectively. Possessing gold in the form of jewelry raises several issues, including concerns about safety and the high expense of ownership. For individuals interested in obtaining gold coins, there is another alternative available to them. ETFs (exchange-traded funds), which trade on a stock exchange and hold gold as their underlying asset, provide investors with an easier and more cost-effective way to invest in paper gold.
Using a P2P lending platform, you can lend money to others more organized and structured. Because this is an unsecured loan with no face-to-face interaction, a P2P lender must be aware of the risks. P2P platforms have a recovery process in place, which should be understood before using the platform's services. Currently, interest rates earned range from 13% to 30%.
The majority of investors desire to make investments to reap massive profits as rapidly as possible while minimizing the danger of losing their initial investment capital. This is one of the reasons why many people are constantly on the hunt for great investment opportunities that will allow them to double their money in a matter of months or years with little or no risk.
Unfortunately, a high-return, low-risk combination in an investment product does not exist, at least not in the traditional sense. Rather than being mutually exclusive, risk and return are inextricably linked; they go hand in hand, with larger returns implying higher risk and vice versa. Before investing in a certain investment avenue, you must ensure that your risk profile is compatible with the risks connected with the product.
Benefits of using the FD calculator
Investing in an FD involves ticking off one's budget and making sure it aligns with the individual's broader financial goals, just like any other financial decision.
Investments in the market such as Mutual funds carry considerable risks. The risk is minimized with a fixed deposit, and the return is guaranteed. If you have losses on your FD investment, they can be absorbed up to a certain point. You need to know how much to deposit into your FD account for this. Fixed deposit interest calculator can be used to estimate this easily.
In addition, FD investment calculator can be used to compare the various FD schemes offered by various government or private banks or non banking financial institutions. With this information, one can understand which scheme can provide the best returns.
Listed below are a few benefits of using the online FD investment calculator tool
- It is an automatic calculator, so there is no scope for error.
- By minimizing cumbersome calculations at multiple tenures, amounts, and rates, time and effort can be saved.
- As the FD investment calculator tool is free of cost, customers can compare rates, tenures, and amounts for different FD combinations multiple times.