Investment is basically a practice of allocating your money with expectation of receiving return on it or to earn profit.
It is done to increase the amount of money or wealth we have in future.
Here is a list of various alternatives to consider while investing your money.
Deposits: No Risk Involved
A deposit is the money kept with financial institutions. It is the most common type of Investment.
People usually prefer deposit as it has no risk and provide security,simplified transfer and for receiving timely interest on it.
They can be classified into three types:
3 Government Super Saving Schemes
Government of India offer various saving schemes to the individuals investors. These schemes are offered either through bank or through post office.
The three important Government Saving Schemes are:
Money Market Instruments
Money market instruments are the short term debt instruments with a maturity period of less than one year at the time of issue.
These instruments have high liquidity and almost negligible risk.
They can be classified into three types:
- Bank deposits
- Post office deposits
- Company fixed deposits
3 Government Super Saving Schemes
Government of India offer various saving schemes to the individuals investors. These schemes are offered either through bank or through post office.
The three important Government Saving Schemes are:
- Public Provident fund
- Senior citizen’s saving scheme
- National Savings Certificate
Money Market Instruments
Money market instruments are the short term debt instruments with a maturity period of less than one year at the time of issue.
These instruments have high liquidity and almost negligible risk.
Some of the examples of money market instruments are-
Debt Instruments: Bonds & Debentures
Bonds or debentures are said to be the long term debt instruments.
- Treasury bills
- Certificate of deposit
- Repo
- Bills of exchange
- Commercial paper
Debt Instruments: Bonds & Debentures
Bonds or debentures are said to be the long term debt instruments.
The issuer of bonds promises to pay stipulated stream of cash flow.
Bonds are generally issued by the government backed by specific physical asset.
Debentures are issued by public companies. They are not backed by any asset or security.
The type of bonds and debentures are:
Ownership of Capital: Equity Shares
Equity Shares represents the ownership of the capital. They are long term financing source. As an equity shareholder in a company, you have an ownership stake in it.
This means that you have share in the residual income and wealth.
Equity share can be classified into broad categories by stock market analysis:
Multitasker Mutual funds
Instead of directly buying shares, you can participate in different schemes by the government which in turn would invest in shares and fixed income securities
Types of Mutual funds are-
Long-term Life Insurance
In broad term, life insurance can be considered as an investment. It provide financial assistance to the survivor of the insured.
Bonds are generally issued by the government backed by specific physical asset.
Debentures are issued by public companies. They are not backed by any asset or security.
The type of bonds and debentures are:
- Preference shares
- PSU bond
- Government securities
- Debentures of private sector enterprise.
Ownership of Capital: Equity Shares
Equity Shares represents the ownership of the capital. They are long term financing source. As an equity shareholder in a company, you have an ownership stake in it.
This means that you have share in the residual income and wealth.
Equity share can be classified into broad categories by stock market analysis:
- Blue chip shares
- Growth shares
- Income shares
- Cyclical shares
- Speculative shares
Multitasker Mutual funds
Instead of directly buying shares, you can participate in different schemes by the government which in turn would invest in shares and fixed income securities
Types of Mutual funds are-
- Equity Schemes
- Debt Schemes
- Balanced Schemes
Long-term Life Insurance
In broad term, life insurance can be considered as an investment. It provide financial assistance to the survivor of the insured.
The different Life insurance policies in India are-
Why to Choose Real Estate?
For most of the investors of the Estate most important asset is a residual house.
- Money bank policy
- Whole life policy
- Term insurance policy
- Endowment assurance policy
Why to Choose Real Estate?
For most of the investors of the Estate most important asset is a residual house.
Apart from the residual house real estate investors are also interested in the following-
A Secured Future Provider: Retirement Products
Retirement Products are the funds provided at the time of retirement.
The important Retirement Products are-
- Agricultural land
- Commercial property
- Semi-Urban land
- A resort
- A second house
A Secured Future Provider: Retirement Products
Retirement Products are the funds provided at the time of retirement.
The important Retirement Products are-
- Employees Provident fund Scheme, 1952
- Employees Pension Scheme, 1952
- New Pension Scheme, 2004
- Pension scheme of mutual funds
Value Keeping Assets: Precious Objects
These are the objects that are usually smaller in size but are highly valuable. The value of these objects increase overtime.
These are the objects that are usually smaller in size but are highly valuable. The value of these objects increase overtime.
The investor can earn profit by buying this object at less amount and selling them in future when price rises.
The important precious objects are-
Underlying Assets: Financial Derivatives
Financial Derivatives are the instrument whose value is derived from the value of an underlying asset.
The most important financial derivatives from the point of an investor are –
These are some of the choices an individual have while investing their money. People usually make their choices of investment considering their potential against losses, future plans,their income, number of years of retirement and their tolerance.
Written By: Hamna Khan
The important precious objects are-
- Gold and Silver
- Precious stones
- Art objects
Underlying Assets: Financial Derivatives
Financial Derivatives are the instrument whose value is derived from the value of an underlying asset.
The most important financial derivatives from the point of an investor are –
- Future
- Options
These are some of the choices an individual have while investing their money. People usually make their choices of investment considering their potential against losses, future plans,their income, number of years of retirement and their tolerance.
Written By: Hamna Khan
Edited By: Komal Jha
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