Wealth Guide: Women's Day Special - How can women make the most of investment options in India

Wealth Guide: Women's Day Special​ - When it comes to investing, women in India already have a head start over men. Women are much better at saving than men, that’s half the battle won. The other half can be won by choosing the right instrument to invest in. Vikas Singhania, CEO, TradeSmart, on the occasion of Women's Day shares his knowledge on how can women make the most of investment options in India.

Vikas Singhania says, “Keeping your money as cash under the mattress or in a savings bank or some instrument product that is not even able to beat inflation may be counted as saving but is not an efficient way of handling money. Apart from having an insurance cover to meet uncertainties women need to invest in money in order to be independent and be prepared for any situation.”

“In India, there are various opportunities now for women to park their funds. An important point before looking at the various options is to start saying at the earliest. Two factors that work in investing are returns and time. While returns that an asset generates are not in our hands, we can try to make the best by investing as early as possible,” Singhania aded.

He explained, “Let’s look at the various options available to Indian women and let’s start with the traditional saving instrument that Indian women have been prioritising for centuries - Gold.”

“Gold: We have a history of using gold to preserve wealth and it has rarely let us down. However, instead of saving in physical gold, the government has launched a new scheme called Sovereign Gold Bond which stores gold in electronic form and also earns a small interest. Gold offers a sense of security and has stood the test of time in giving returns.“

“Public Provident Funds: The next common instrument and one that protects capital is the Public Provident Fund (PPF). It’s a long term saving scheme having a tenure of 15 years and yields and offers a better interest rate than a savings account or most fixed deposits. The present rate is 7.1%. Annual investment can start from as small as Rs 500 to Rs 1.5 lakh.“

“Kisan Vikas Patra is another popular investment plan offered by post offices that can be done periodically. The systematic investment plan (SIP) is valid for 9 years and 5 months and the current interest rate is 6.9 percent annually. This scheme also comes with capital protection and has a minimum investment of Rs 1,000 and multiples thereof. There is no maximum limit of contribution.“

“National Savings Certificate (NSC) another scheme offered by post-offices, presently offers 6.8 percent annually. NSC is popular among working women as it offers the benefit of investing and tax deductions. The scheme comes in two tenures of five years and 10 years.“

“Post-Office Time Deposit Scheme: The scheme offers various time deposit options ranging from 1,2,3 and 5 years. Income tax benefits are available for deposits of 5 years only. Returns differ based on the tenure, currently, a one-year deposit comes with a 5.5 percent return and a five-year deposit with 6.7 percent.”

“Another scheme offered by the post office is the Post-Office Monthly Income Scheme. This is a type of fixed deposit scheme offered by the post office and backed by the government of India. It has a tenure of 5 years and presently offers a 6.6 percent return. Bank Fixed Deposits or corporate deposits with Triple A rating are also a good avenue to invest. The rate of return varies with banks and corporates. There are no maximum limits on these investments,” he added.

“Mutual funds are increasingly becoming a popular investment vehicle. There are multiple options available for investing in mutual funds like liquid, debt, and equity schemes. Returns between these schemes vary and one should invest depending upon one's goal and risk profile. Starting a SIP is a good way of steadily investing. Mutual funds also offer tax deductions but some like equity schemes do not offer capital protection. One should do proper research before investing in mutual funds,” he advised.

“Shares: One can invest in shares only after proper study and gaining a decent understanding. Investment in shares normally offers the highest returns but comes with the highest risks. The best returns can be possible by investing in good growth shares and holding them for a long time,” he opined.

“Women in India are now spoilt for choices when it comes to investing. The important thing is to have a proper roadmap to investing rather than locking your money in any instrument without understanding. Having a goal, the time to achieve it, and mapping it required investment option is the best way forward,” he concluded.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)