The following summarizes the options in the short term and long-term investments available for Indian investors.
1. Bank Fixed Deposit (Bank FDs)
Investors with low risk appetite, the best investment in 6-12 months
Also known as term deposits, this product would be offered by all banks. Minimum investment period for the bank fixed deposit is 30 days.
The ideal time for investment for bank FDs is 6 to 12 months, which usually gives the bank less than 6 months FDs bank are likely to be lower than money market returns.
It is important to plan your investment horizon, while investing in this instrument, because the early retirement usually punished.
2. Company Fixed Deposits (FDs)
Ability to return within a fixed income portfolio will soon have tools for small businesses to borrow to investors. Typically, the future is open all year.
Investing in the near future, if you have extra money for more than 12 months. Choose carefully during the investment period of most of the near future, not encashable before their maturity.
Just like all the others, the risk is embedded feature of the near future, especially because it is not mandatory for companies to obtain a financial rating of this instrument.
Investors should not consciously (or a credit rating or even an expert), select the companies they invest There are many small investors lost their life savings by investing in the near future, issued by companies that have run into financial problems.
3. Mutual Funds
Have you ever made an investment in partnership with another person? Thus, mutual funds work in much the same principles. Investors pool their money to buy stocks, bonds or other investments.
Investing in mutual funds allows an investor –
1. Avail the services of a professional money manager (who manages the mutual fund)
2. Access a diversified portfolio despite making a limited investment
Our primer Investing in Mutual Funds should educate you a lot more on the benefits of investing in mutual funds and strategies you could employ.
4. Savings Bank Account
Use only for short-term (less than 30 days) surpluses
Often the first banking product people use, savings accounts offer low interest (4%-5% p.a.), making them only marginally better than safe deposit lockers.
5. Post Office Savings Schemes (POSS)
Low risk and are popular because POSS TDS generally produce more than bank FD. Terms of monthly income if you are a pensioner or have regular income needs. In addition to low (government) risk, the fact that no tax deducted at source (TDS) in the POSS is a major attraction. Post Office offers several programs including National Savings Certificates (NSC), National Savings Scheme (NSS), Kisan Vikas Patra, Monthly Income Plan and recurring deposit scheme.
6. Bonds and Debentures
Alternative to large investments, or use some of the gains discounts addition
The company has suffered, bonds are fixed income securities issued by companies. How, market illiquid secondary outcome and the lack-luster in the primary market, investments in these instruments is largely skewed towards the problems of financial institutions. Even if you can find high-performance alternative to the secondary market, if you do not want the problems associated with bad deliveries and the transfer process, or want to invest a large sum of money, the main market area is a better choice.