4 ways to invest smartly on a small budget

Category: Investment 10 0

The thought of investing may seem daunting if you’re in the early stages of your career or if you don’t find yourself with much left over at the end of each month. You’ve probably heard time and again that it is important to invest your money and let it grow, but the question is, where to begin? You’d be surprised to learn that there are a variety of options available to you, no matter your budget or experience.

Read on to find ways in which you can make Smart Investments on a shoe-string budget.  

Mutual Funds

Playing the market is a game of experience, and for the first-time investor, can be a challenge. Mutual funds are a great way to make the most of the market, even if you don’t have the know-how of a stock expert. Through the Systematic Investment Plan or SIP, you can invest as little as Rs.500 per month to enjoy generous returns. Moreover, investments up to Rs. 1.5 lakhs in Equity Linked Savings Schemes, or equity mutual funds, are tax deductible as per Section 80C of the Income Tax Act.

Public Provident Fund

PPFs are among the most popular investments in the country, especially for salaried individuals. The PPF works a little like a piggy bank, when you put in up to Rs.1.5 lakh in a financial year, into your PPF account. You can choose to do this in instalments, and this financial discipline can serve you big returns in the long run. Currently, the interest rate if 8% and this is reset every quarter. PPF has a minimum tenor of 15 years, which works to your advantage since it forces you to invest for the long term. What’s more, all returns are tax exempt, and the investment can be claimed for deduction under Section 80C of the Income Tax Act too.

Post Office Recurring Deposit

PO RDs are a reliable medium-term investment, offering relatively high interest rates and compounded returns on maturity. As of now the interest is around 7%. The minimum tenor is 5 years, which makes them perfect as a fund for smaller foreseeable expenses such as a new car or a home renovation. What’s more, the minimum investment is a mere Rs.10, which makes it accessible to all.

Fixed Deposits

Among the most popular investment instruments is the fixed deposit. FDs are offered by all major banks and financial institutions, and are among the most flexible and accessible investment accounts available. Fixed deposit tenors can last anywhere between a few months to 10 years, and you can choose to receive the interest gains at periodic intervals or at maturity. What’s more, the interest rate is fixed for the duration of your tenor, which means your money is immune to fluctuations in the market.

If you’re looking to invest in FDs, consider the Bajaj Finance FD, which offers an interest rate as high as 8.75% and 9.10% for seniors on a 36-month FD that pays out on maturity and then an additional 0.25% on reinvestment. Start by using an Fixed Deposit Calculator to find out how your money can grow, based on your investment amount, desired tenor, and interest rate.

Irrespective of your budget, your income, or your imminent expenses, steady and smart investments are a must. Not only do they cushion your future finances and keep you safe in the event of an emergency, but they are also a way to ensure you’re making the most of an evolving market. Find the right investment option for you, and start investing today!

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