You all have specific life goals and financial objectives that you wish to achieve in your lifetime. It could be getting a new car, building the house of your dreams, securing your child’s educational future, or building a safety net for your retirement. Achieving these goals requires significant financial backing, and you spend your lives working hard to achieve them.
However, your savings take a blow as your cost of living continues to rise. Along with this, as you grow in your careers, your income will increase as well, and consequently, your tax liabilities rise. Therefore, it is important to look for investment avenues that ensure returns with minimum risks involved. While many plans are available in the market that offer you low risk, you must opt for them after carefully assessing your risk profile and objectives.
Some of the low-risk plans available in the market are:
- Fixed deposits: Fixed deposits are one of the safest avenues available that provide a significant rate of return when compared with other low-risk investments. Investing in fixed deposits provided by good financiers will offer additional advantages like payouts, high stability, credibility, flexibility, etc.
- Money market funds: Money market funds are a variant of mutual funds designed for individuals who do not wish to lose out on their investment principal. The plan generally pays a little interest along with making your cash deposit in the fund. They have a strong history of safeguarding the value of your invested funds. Fluctuations in the market will have a very minimal effect on them. Therefore, you won’t have to worry about losing your principal.
- Treasury bills: They offer a short-term investment opportunity generally up to 1 year. The Government of India provides three types of treasury bills through auctions – 91 days, 182 days, and 364 days. The minimum amount required for investing is Rs. 25,000, and the amount will increase in multiples of Rs. 25,000. They offer minimal risk as the Government has offered these plans.
- Certificate of deposits: Financial institutions and commercial banks provide a certificate of deposit. But, you will need to deposit a minimum amount of Rs. 1 lakh for a specified period, and you can get guaranteed returns. The certificate of deposit will ensure you get a fixed interest rate for the period regardless of the interest rates. But, you will need to pay the penalty if you want to get the funds ahead of time.
- Savings plans: A savings plan is an insurance plan that provides policyholders with the ability to get assured returns and protect their loved ones. With a savings insurance plan, your premiums will be split for allocating towards insurance coverage and returns. Savings plans in India are considered risk-free savings opportunities as they offer assured returns. Many insurers like TATA AIA Life provide regular income plans where the policyholder can opt to get the returns as monthly income, which can be beneficial when they retire.
Summing up:
If you’re looking to build savings for yourself, it is important to factor in multiple factors like the rising cost of living and tax liabilities. These factors may hamper your ability to build substantial savings. However, if you follow some money-saving tips and opt for plans that will help you build your savings efficiently, you will be able to minimize the risk significantly. There are many low-risk options available in the market that will help you achieve your financial goals.
Some frequently asked questions:
- How can I grow my savings without risk?
If you wish to grow your savings without risk, you must first analyse your risk profile and opt for the plans that fit your risk profile. Along with this, it would help if you opted for plans that come with minimal risks, like savings plans, fixed deposits, etc.
- How can I save a little money every month?
If you wish to save a little money every month, you must firstly pen down your monthly expenses. Once you have listed down your expenses, you must separate them between necessary and unnecessary expenses. After separating them, you must lower the amount you spend on unnecessary expenses. You can use the extra funds to invest in money savings plans.
