Gone are the times where people were satisfied to just live their life making enough money to pay their bills. These days, people earn money so that they can use it to make more money. For this reason, nearly everybody is always looking for the best investment options to put their money in. With an ocean of options available in the market, finding the best one seems nearly impossible. Truth is that there is no one option that is best for everyone. The ideal investment opportunity for you depends on a wide range of factors. These include your financial goals, your risk appetite, etc. This is what differentiates various investment options.
While some investment options involve a high level of risk, others focus on steady returns through safe investing. However, the key to a profitable and safe investment is often found to be planning your investments for a long term. Short term investments are often volatile and risky in nature and they have no guarantee of returns. Hence, when looking for investment options, a smart investor would always go for safety with the chance of significant capital growth. Here’s a list of the best investment options for you and some tips to make your experience better.
- Mutual Funds
Mutual funds have been around long enough for them to be a tried and tested financial product. Each year, they attract more people to invest with their whole range of features and benefits. However, before you decide to follow the same example, you should know what these mutual funds are.
Mutual funds are financial products that allow you to invest smaller amounts regularly or a bigger amount one time, depending on how you feel comfortable. Moreover, there is an incredible variety in mutual funds with equity-based, debt-based, and hybrid mutual funds as its broad classifications.
Mutual funds allow you to take advantage of compounding and develop a hefty sum off your investment. This means you end up making profit over your profits. Hence, they should be your first choice when looking to make an investment.
- ULIPs
ULIPs are where financial security and investing meet. It is a market linked life insurance plan that puts the money you pay as premium into the right investment opportunities. However, for this reason, the life coverage that you may have in ULIPs will be considerably lower than term insurance plans.
In terms of investment options, ULIPs offer you great flexibility to allocate your money between equity and debt asset classes. Moreover, much like a lot of other insurance policies, ULIPs offer a tax deduction benefit as per Section 80C of the Income Tax Act. If you are some one that want to generate wealth aside from your regular income, ULIPs are the option for you.
- Endowment plans
Endowment plans are essentially a product that allow you to get life coverage along with a mechanism for saving money over time. They offer a basic level of life coverage along with different instruments that you can use to save your money. You can find numerous variants of endowment plans that can help you make your family’s future secure and create some savings on the side as well.
Endowment plans as good as they are, have their own set of advantages and disadvantages. The commonly found complaints among policy buyers is that there is a lack of liquidity and less than ideal insurance coverage. Moreover, the returns that you may receive may be good or may be comparable to more than interest rates offered by banks for a savings account. At the same time, these returns could also be lower than those offered by small savings schemes.
With endowment plans, there is a lock in on the money you put into the policy. This means that you cannot make a withdrawal until a fixed period of time. On the other hand, surrendering the funds could mean that all the money invested is lost.