Investments

Debt mutual fund schemes are suitable for investors who want steady returns. They are less volatile and, hence, considered less risky compared to equity mutual funds. Debt mutual funds primarily invest in fixed-interest generating securities like corporate bonds, government securities, treasury bills, commercial paper and other money market instruments.

Equity mutual fund schemes invest predominantly in equity stocks – across different sectors, sizes of companies listed on the stock exchanges. The benefit of investing in an equity Mutual Fund is that are indeed investing in the stock market but without the hassle of tracking your investments since the Fund Manager is accountable for generating returns.

A bank fixed deposit is considered a comparatively safer (than equity or mutual funds) choice, but with lower returns. As per the need, one may opt for monthly, quarterly, half-yearly, yearly or cumulative interest option in them. The interest rate earned is added to one’s income and is taxed as per one’s income slab

The PPF is one product a lot of people turn to. Since the PPF has a long tenure of 15 years, the impact of compounding of tax-free interest is huge, especially in the later years. Further, since the interest earned and the principal invested is backed by sovereign guarantee, it makes it a safe investment.

Investing in stocks directly is not an easy job – you need the right advice to pick the right stock and time your entry and exit. The silver lining is that over long periods, equity has been able to deliver higher than inflation-adjusted returns.

Investment in paper gold is more cost-effective and can be done through gold exchange traded funds (ETFs). Investing in Sovereign Gold Bonds is another option to own paper-gold. An investor can also invest via gold mutual funds.