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A discussion on various Investment Options in India. brought to you by Palium Skills as part of Investor Education Awareness program The different Investment Options in India are  Fixed Deposits.  Mutual Funds.  Public Provident Fund (PPF).  Stocks.  Senior Citizens’ Savings Scheme.  Certificate of Deposit.  Bonds.  Real Estate.  National Pension System (NPS).  Insurance & Unit Linked Insurance Plan (ULIP). Fixed Deposits.  Fixed Deposits, are offered by banks, post office and non-banking financial organizations (NBFCs), are an excellent option to grow your funds while protecting your capital.  It is a popular choice since it allows you to deposit a lump sum cash with your lender and choose a term that suits your needs. Following the maturity of the term, you get the principal back together with interest, if any. The deposit earns interest at the rate you invested in for the duration of your deposit.  Premature withdrawals may incur a penalty. Hence, it is advisable to choose a suitable deposit tenure after keenly evaluating your future financial goals. Mutual Funds.  Mutual funds (MFs) invest in market-linked instruments such as stocks, bonds, or a mix of both equity and debt instruments.  Investors in India can choose between equity funds, debt funds, and balanced funds depending on their financial goals and requirements.  One can also invest small amounts periodically in MFs using a Systematic Investment Plan (SIP).  Review your risk preferences before choosing from the different types of investment options. Invest in equity mutual funds if you have a higher risk appetite; for conservative investors, debt schemes are ideal. The options exist to suit the preferences of varying types of investors in India.  Understand the prevalent taxation system before investing. You can invest in tax-saving mutual funds such as the ELSS (Equity Linked Savings Scheme) to help maximize your returns. Public Provident Fund.  A government-backed investment option, Public Provident Fund, provides you risk-free returns making it one of the best investment options.  The interest is revised and paid by the government every quarter.  Although the maturity period of PPF is 15 years, you can start the partial withdrawal of your money after completion of six years.  However, you can also use your PPF balance as security to take loans. It falls under the EEE category of tax savings, since the principal amount, interest earned, and maturity amount – all are eligible for tax savings.  Thereby PPF is one of the best investment options available.  As per Section 80C of the IT Act 1961, you can avail tax deductions for your contribution towards the PPF account. Stocks.  Investments in equity markets or stocks provide avenue for wealth creation over a long period of time. It takes a great deal of research and prudence to understand the different types of investment opportunities and identify the right stocks to invest in.  You also need to time your entry and exit prudently, and it involves continuous monitoring of investments.  Capital appreciation happens over long period of time and is dependent upon market volatility.  Depending on the types of investors in India, stock investments can bring good returns on the basis of risk-appetite.  The good news is that in the long run, some of the stocks has been shown to deliver greater inflation-adjusted returns when compared with many other classes of assets. Certificate of Deposit.  Among the many investment types in India, Certificate of Deposit is a money market instrument which is issued against the funds deposited by an investor. It is invested with the bank in a dematerialized form for a certain period of time.  Certificate of Deposit is issued by Federal Deposit Insurance Corporation (FDIC) and regulated by the Reserve Bank of India (RBI).  A CD can be issued to a single issuer for a minimum of Rs.1 Lakh and its multiples.  Maturity period of a Certificate of Deposit issued by the commercial banks can range from 7 days to 1 year.  Whereas, maturity period for a certificate of deposit issued by financial institutions ranges from 1 year to 3 years. Senior Citizen Savings Scheme.  It is one of the best investment options backed by the Government of India and is meant for people above 60 years of age.  The amount deposited in this scheme matures after five years from the date on which the account was opened. It can also be extended for once for the next three years.  What attracts senior citizens in India to this scheme the most is the interest gained over savings.  Currently, the SCSS interest rate is 7.4% as of Quarter 1 for FY 20-21, which is the highest amongst other saving schemes available in India. Bonds.  Bond is one of the debt investment types in India. Investors lend money to the issuer company in exchange of a bond and in return of the bond, the issuer is obliged to pay interest on the principal amount.  The issuer is required to repay money borrowed along with a fixed rate of interest on the amount borrowed. Nowadays, variable rate of interest is also quite common.  Bonds come with maturity dates by which the borrower is required to pay principal amount back in full or risk default.  Bond are the types of investment in India which traditionally comes with a fixed rate of interest (also known as coupon). But, nowadays variable rate of interest option is also available. Unit Linked Insurance Plan (ULIP).  Unit Linked Insurance Plans (ULIPs) are among types of investments in India that come with tax benefits as well. It is an instrument that offers you the advantage of investment combined with insurance.  The premium you pay to remain invested is divided into two portions. One part goes towards providing you a protective life cover, while the other is invested in market-linked instruments or funds.  ULIPs provide deductions under Income Tax Act 1961 as per prevailing tax laws, since the premium paid is deductible, and the maturity benefits, long-term capital gains tax-free.  ULIPs allow the ability to easily redirect your premiums and switch funds, according to market movements and evolving risk appetite.  ULIPs are investment types that offer flexibility to opt for an asset allocation strategy depending on the risk appetite and goal in mind. Policyholder can opt for a fixed proportion to be maintained in equity and debt throughout the policy term. National Pension Scheme.  The National Pension System (NPS) is another investment plan backed by the government of India. It is focused on long term growth, making it the perfect addition to your retirement investment plan.  The amount you park in this scheme is invested in a variety of other investment vehicles like equity, deposits, government securities, corporate bonds, and other funds. You can remain invested till you reach the age of 60.  Make the most of your NPS investment by claiming the applicable tax benefits.  NPS contributions are investment types that qualify for deduction under sections 80CCD (1), 80CCD (1B), and 80CCD (2).  Two types of investment options available – active mode, auto mode. You can reach us through phone at +91 99031 30500 or +91 90510 92035 or 033 4001 7947. We are also on WhatsApp at +91- 99031 30500. One can Email us at [email protected] Visit our Website: www.paliumskills.com