Investment is an important aspect of financial planning. It is important to invest in financial products that offer good returns and help you achieve your financial goals. With so many investment options available, it can be overwhelming to select the right one. Here are some investment options that you must consider in financial products.
- Fixed Deposits
Fixed deposits are a popular investment option for those who want to earn a fixed rate of return. They are low-risk investments that offer guaranteed returns. The interest rate on fixed deposits is higher than a savings account, and the investment period can range from a few months to a few years. Fixed deposits are offered by banks and other financial institutions.
- Mutual Funds
Mutual funds are a type of investment where your money is pooled with other investors’ money and invested in a diversified portfolio of stocks, bonds, or other securities. Mutual funds offer the benefit of diversification, which reduces the risk of investment. They are managed by professional fund managers who decide where to invest the money. Mutual funds are offered by asset management companies.
- Public Provident Fund (PPF)
PPF is a long-term investment option that offers a fixed rate of return and tax benefits. The investment period is 15 years, and the interest rate is currently 7.1%. The investment in PPF is eligible for tax deduction under section 80C of the Income Tax Act. PPF is offered by the government of India.
- National Pension System (NPS)
NPS is a retirement-focused investment option that offers tax benefits. The investment in NPS is eligible for tax deduction under section 80C and an additional deduction of up to Rs. 50,000 under section 80CCD(1B). The investment in NPS is managed by professional fund managers who invest the money in a diversified portfolio of stocks, bonds, and other securities.
- Equity Shares
Equity shares are a high-risk investment option that offers the potential for high returns. When you buy equity shares, you become a part-owner of the company. The value of equity shares depends on the performance of the company. Equity shares are traded on the stock exchange, and the price of the shares can fluctuate depending on the demand and supply.
In conclusion, there are several investment options available in financial products. It is important to select the right investment option based on your financial goals, risk appetite, and investment horizon. It is recommended to consult a financial advisor before making any investment decisions. Happy investing!