Financial Investment Planning

Financial planning is an important aspect in successfully managing your hard earned money

. With proper financial planning you can secure your future and increase your overall earnings as well.

While doing financial planning you need to decide what kind of investments will suit your needs. You can go in for some short term investments like opening a savings bank account/ bank fixed deposits or can opt for long term investments like Public Provident Fund/ Recurring Deposits etc.

Some available options for your financial investment planning are:

Savings Bank Account: This is generally the start of all your banking transactions. Since saving bank accounts offer very less interest so it is advisable to keep money in it for a short duration only or store only your free cash.

Fixed Deposits: Fixed deposits can be of two types:

Bank Fixed deposits - Fixed deposit is a scheme in which you put a certain amount of money for a fixed period. This offers a fixed and better interest rate than savings bank account. This is a good investment option if you do not want to take any risk with your investments. Minimum investment period in this is 30 days.

Company Fixed Deposits (FDs) - Just like banks, Non Banking Finance Companies (NBFCs) also offer fixed deposit option. These companies generally offer a higher rate of interest than bank FD's since investing with them is riskier than investing in bank FDs. All bank FD's are backed by central government whereas companies are running at their own risk. So if there is some problem in the company then there is no guarantee on the kind of return you will get. Also before investing in any kind of Company FD's it is a good idea to check its ratings and do a thorough research on it. Many people lose money by investing in unstable company FD's.

Mutual Funds - Mutual funds are like having your own investment manager. In a mutual fund, money is generally pooled in from a lot of investors. Then the fund manager will invest this money in diversified portfolio comprising bonds, other mutual funds, stocks, gold or other metals etc. What is most appealing about this scheme is that even though you make a small investment you get the benefit of a diversified portfolio.

Life Insurance Policies - Life insurance policies are used to financially protect the family of the insured person in case the person dies. These policies attract certain charges and commission. If you have any dependents and are married with a family to support, it is a good idea to invest in life insurance. Life insurance offers tax benefits and investment opportunities along with security. It is advisable to invest in a dual advantage life insurance India policy if you want financial security as well as wealth growth at the same time. But if you are considering life insurance only as an investment option, then it is better to invest in pure investment products.

Stock Market - This is one of the riskiest as well as maximum returns offering option for your investments. Stock market is a medium by which companies generate capital by selling a small percentage of their company by means of shares. The general public gets a chance to be a part of the company by owing some of its shares. Companies whether public or private, take maximum risks and thus generate maximum returns. To share in their profits, one needs to buy shares of the company and receive high rates of return.

Your long/ short term investment planning can be a basket of all or some of the above mentioned options. The best portfolio differs from person to person according to their financial/ security needs

by: Agarwal

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