In today’s world, earning money is not enough to lead a comfortable lifestyle and save enough for the future. Most salaried individuals live from paycheck to paycheck, i.e., every month they wait for the salary to get credited into their accounts and then immediately use it to settle their debts and monthly expenses.
However, many individuals tend to allocate a significant portion of their salaries for lifestyle expenses, weekend party budgets, and credit card debts, while neglecting the need to save for emergencies. Eventually they end up saving either a small amount of their salaries or have no savings to show at the end of the month.
While it may be difficult to cut down on the monthly expense budget, there is one way you can maximize your savings – by investing in traditional and market-linked instruments such as mutual funds. Investing is crucial, not only for efficient money management but also for your family’s financial security in the long run. Following are a few practical ways to maximize your savings:
Invest in Mutual Funds
Mutual funds are one of the most popular investment plans that offer high returns. Essentially, mutual funds investment havens, wherein several investors pool their money and then invest in a variety of equity shares and bonds.
Moreover, investing in mutual funds is a hassle-free and paperless process, where you can invest as per your financial needs and market conditions. Mutual funds offer ease of investment by allowing you to put your money into pure debt funds, equity funds or hybrid funds. Overall, mutual funds are known for their liquidity, diversification, transparency and low cost.
Start a Fixed Deposit
In India, FD (Fixed Deposit) is one of the most popular ways to save money. In this traditional, relatively risk-free investment scheme, you deposit a lump sum in the bank for a fixed tenure and get a guaranteed return of investment. The interest rate on these deposits varies from bank to bank and according to the investment period.
Before investing in an FD account, it is crucial that you compare between different FD schemes available using an online FD calculator. Thus, you can go for the best possible FD scheme that aligns with your goals.
Fixed Deposit accounts offered by reputable banks such as Axis Bank offer both fixed and variable rates of interests. These term deposit schemes; therefore, not only help you save money but also ensure that you don’t have to worry about your investment returns.
Store it in Public Provident Fund
Public Provident Fund is arguably the best bet when we talk about long term savings-cum-investment funds. PPF schemes combine the benefits of tax saving, returns, and safety into one investment option. The government of India offers guaranteed returns on your investments under PPFs.
Moreover, PPF is tax-exempt under section 80C of the Income Tax Act, which allows you to reduce your tax liability by up to Rs. 1.5 lakh in each financial year throughout the investment period.
Invest in Real Estate
Traditionally, real estate in India continues to be a profitable investment option for both salaried individuals and business owners. Unlike stock and bond investments, investing into real estate requires a different strategic approach, wherein you purchase a property for the sole purpose of making a profit on it. In most cases, investors either rent out the property or resell it at a higher cost.
Become a Silent Partner in a Startup
A silent partner in a startup is someone who has a monetary stake in the business but doesn’t take an active part in the management activities. In this investment strategy, silent investors get a significant return for their venture, without the hassles of dealing with the day-to-day operations.
Often, your salary and your savings alone may prove inadequate to support your dreams and future goals. Therefore, you need to maximize your savings through investments into traditional instruments such as FDs and market-linked options such as mutual funds and online saving plans. Remember, you need to invest smartly and make your money work hard for your goals!