8 interesting ways to make your savings grow
A rupee saved is a rupee earned, goes the saying. But just saving is not enough, your money should grow according to your needs. And how do you achieve that? The answer is simple – through investments. By investing your savings, you can multiply the amount, all while you are busy saving some more.
There are many short- and long-term options available, so it’s up to you to choose one that takes into account your future needs, and the amount of money at your disposal. Even if you exclude the options most people are familiar with – Savings Account, Fixed Deposits, Insurance, Gold, Real Estate, and Public Provident Fund – there are many other instruments available to help you grow your money and secure your future.
1. Recurring and Fixed Deposits
People looking at saving money often ask whether investing in a Recurring Deposit (RD) is a better option than a Fixed Deposit (FD). While FDs and RDs are few of the safest forms of investment available, but there are some differences between the two:
- RDs are a type of ‘term deposit’, so people with regular incomes can save a fixed amount every month and earn interest at the same rate offered on FDs
- FDs rely on you making a lump sum payment
In case you’re concerned about ensuring the safety of your money, HDFC Bank offers a Regular Fixed Deposit, which offers:
- Easy investment with high returns
- Great rates, flexibility, and security – all in one offering
- Higher rates of interest for senior citizens
- Convenience of making deposits through NetBanking
The 5-Year Tax Saving Fixed Deposit scheme too comes with certain benefits:
- Minimum investible amount is Rs 100, and thereafter in multiples of Rs 100
- You can invest a maximum of Rs 1.5 lakh in a given financial year
- You can choose between a monthly and a quarterly payout
- You are eligible for deductions under Section 80C of the Income Tax Act (IT Act)
On the other hand, if you don’t want to invest a lump-sum, HDFC Bank Recurring Deposit scheme allows you to invest small amounts every month while enjoying the following benefits:
- Same rate of interest as an FD account
- Start with an investment as small as Rs 1000 (and multiples of Rs 100 thereafter), up to a maximum of Rs 15 lakh per month
- A minimum tenure of 6 months (and multiples of 3 months thereafter) up to a maximum of 10 years
Looking to apply? Click here to invest in the HDFC Bank FD and HDFC Bank Recurring Deposit .
2. Company Fixed Deposits
Company FDs, also called Corporate FDs, offer higher rates of interest compared to bank FDs, and are therefore a very popular option among risk-averse investors. If you’re willing to bear a small degree of risk, and more importantly, willing to invest for the long term, this can be a good option. Remember, you can’t withdraw the invested money before maturity. However, you can evaluate your investment using a FD interest caclulator that will help you make an informed decision.
3. Mutual Funds
Mutual Funds as an asset are the wealth creators for any portfolio over the long term. Mutual Funds are a relatively safe way to invest in the stock market, without leaving yourself open to the same level of risk as trading in equities. Investing in Mutual Funds has its own benefits, such as -
• Low investment cost
• Managed by professional managers
• Offers flexibility in terms of mode of investments and liquidity
• Offers variety of products suitable as per risk profiles & investment objectives
Performance is tracked & recorded
Systematic Investment Plan (SIP) is a tool that helps in wealth creation, by investing small amounts of money at regular intervals, over a period of time. Not only does this average out the risks associated with market fluctuations, but also provides better long-term returns than most other saving instruments.
Benefits of Investing in Mutual Funds through SIPs -
• Disciplined Investment approach
• Achievement of Long Term Financial Goals
• Rupee Cost Averaging
• Benefits of Compounding
Simple principles in order to reap maximum benefits of SIP - Starting early , Investing regularly, Investing rightly
*Disclaimer –Mutual fund investments are subject to market risks, read all scheme related documents carefully
4. Post Office Savings Schemes
Your much-ignored neighborhood post office offers many schemes, such as:
- National Savings Certificate (NSC)
- National Savings Scheme (NSS)
- Kisan Vikas Patra (KVP)
- Monthly Income Scheme
- Recurring Deposit Scheme
All these instruments typically yield a higher return than bank FDs, have a low risk associated with them, and are not subject to Tax Deducted at Source (TDS).
5. Money Market Funds
Also known as ‘liquid funds’, these are short-run liquid investments with easily accessible cash equivalent assets and high credit rating. These are recommended for people with low risk- low return appetite.
6. Equity-Linked Savings Schemes (ELSS)
As with any product linked to market performance, there’s an element of risk with ELSS, but the rewards are potentially higher too. These are a highly attractive savings option for two reasons:
- Designed to save tax under Section 80C
- Have a short lock-in period of only 3 years
With ELSS your money multiplies faster than most other forms of investments – a result of the effect of averaging and the power of compounding.
7. Unit-Linked Insurance Plans (ULIP)
ULIPs are a market-linked offering that provides a combination of investment and insurance. These are flexible products, where the equity-to-debt ratio reflects your risk appetite. Many insurance companies offer ULIPs, and low commission and charges make them a cheaper option as compared to mutual funds.
8. Equities or Shares
This is one of the riskiest forms of investment, so you need to be well-versed with the stock market. The thumb rule must always be to invest for the long term so that the benefits of the investment can truly shine. Playing the markets for quick returns is not an ideal strategy, so be aware of the amount of exposure you allow yourself.
However, if you are a relatively savvy investor who’s done some research, HDFC Bank has a secure, modern and hassle-free Demat solution for you. This flexible offering can be customised for purchasing and amassing investments in shares, mutual funds, Initial Public Offerings (IPOs), Exchange Traded Funds (ETFs), or Non-Convertible Debentures (NCDs).
Armed with this knowledge, you should spend some time thinking, researching, understanding, and talking to your financial advisor (or a knowledgeable friend). When it comes to investments, there are many factors to consider. Only once you have evaluated these, should you move to invest in a suitable instrument. Remember to diversify your savings across multiple products, and not just one or two. Happy investing!
You can create your Fixed Deposit Asset today with an HDFC Bank Savings Account. New customers can book a Fixed Deposit by opening a new Savings Account, existing HDFC Bank can book their Fixed Deposit by clicking here.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
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