Categorized | Investment Insurance

things to keep in mind while choosing investment plans

Today, there is plethora of investments options available to Indians. However, the challenge is to find the best investment plan, to do that one has to compare the various plans in the market and choose the one which meets their demands. Some would give you short Term benefits while others offer long term benefits. The increasing number of investors in Indian market allow private players to offer tailor made investment plans to their clients.

Moreover the growing number of young investors seeks support and guidance to invest their money in the right plans. To have money is good but one should know how to manipulate it to get higher investment returns.  Let’s delve into the different types of investment plans.

Investment plans
  • Bank fixed deposits: This is operated under the control of Reserve Bank of India; many prefer this investment plan owing to its high reliability. It offers interest rate of 8.5%-9.25% yearly based on the tenure and bank. The deposit can be held by the bank for a minimum period of 15 days and maximum tenure of five years.
  • Bonds: These are debt security. While you buy a bond, you offer money to the issuer and in return you get a bond that provides a specific rate of interest throughout the bond tenure and issuer would give back the principal amount on Maturity of the bond.
  • Stocks: An individual can hold stocks of the company, the stock holders are eligible to share the profit earned by the company deducting the expenses.
  • Mutual Funds: Mutual funds are best option for people who do not have enough time to learn about stocks. These are managed by bank or private players which include fixed income scheme, tax saving schemes, hybrid schemes, etc.
  • Insurance: Insurance is also another form of investment that include whole life policy, money back policy, Term assurance policy, Unit Linked policy, Endowment assurance Policy etc.

Factors to consider while choosing an investment plan
  • Know your risk: Many want to double the amount what they have in hand currently. Though investment returns are good in stocks and mutual funds, many Risk factors are associated with it. Those risk factors are clearly mentioned to you at the time of taking the investment plans. Read them carefully before investing to safeguard your money.
  • Invest the amount which you can afford: Remember to invest the money which is affordable by you. You should ensure to invest only the additional capital after securing money for daily needs. By doing so, you can see your money grow and can manage the present expenses. Investing all the money in hand without leaving for daily needs will put you in trouble.
  • Plan before you invest: You should have a proper long term plan before investing; what is the kind of investment plan you opted for, what will be the interest rates if any or investment returns.
  • Know your present financial condition: Before you opt for an investment plan, you should know your current financial condition. You should be aware about your present goals and risk tolerance.
  • Check the performance of investment plans: You can check the performance of investment plans and its returns by studying the current and previous market. Also, ensure that the plan you choose suits you and you should be able to handle the product otherwise there is no point in investing.
  • Study the product: Whether you choose to invest in stocks, mutual funds or insurance, know about the product well. In case you have plans to invest in ULIPs (United Link Policy), know the premiums, returns and its coverage.
Investment plans have many advantages, it offers additional income, enhances future wealth, and fortifies your investment portfolio. You just have to learn about the products and should invest after thorough study of the market.