Keep investment simple and flexible:

Keep investment simple and flexible:

Keep investment simple and flexible:

Investors needs to keep investment simple,flexible and as possible liquid.Ideal portfolio should be mix of different securities like fixed income,Equity and commodities like Gold and Silver.

1.BANK FIXED DEPOSITS:Itis themost simple way of investing.It can be done just byfilling form onlineor offline.One canliquidateinvestment at any point of time.Onlydisadvantage is thatinterest income is taxableand post tax returns are not so much attractive,especiallyif anyone comes in highest tax bracket of 30%.As per current tax laws fixed deposits with lock in period of 5yrs have tax benefits U/S 80C.

2.COMPANY FIXED DEPOSITS:RBI have permitted non-banking finance companies as well manufacturing companies to accept fixed deposits from public with certain terms and conditions.In general,rate of interest is higher than that of bank fixed deposits but comes with some what higher risk.But investor can study the fundamentals of such companies and can invest small part of overall investment.These FDs offer good tool of diversification in fixed income products.

3.MUTUAL FUNDS:Mutual funds collects money from investors and invest in securities depending upon scheme objectives.Both active and passively managed funds are available in the market.Funds offers diversification and risk management to investors.Conservative investors can invest in systematic ways to manage risks and curb market volatility.

4.PPF:Investors need to open a PPF account at nerarby office or designated nationalised banks like state bank of India.Its more of savings instrument than investing.It has tax benefits u/s. 80c of income tax act.Also maturity amount is taxfree.

Only disadvantage is that saving is less liquid and offers only 8% rate of interest.Lock in period is 15 years but one can liquidate some saving after 7 yrs with certain terms and conditions.One can think of it as longer term saving instrument.

5.POST OFFICE SAVING:Post offices offers different saving instruments like Recurring deposits,term deposits,Kisan Vikas patra,NSC,Senior Citizen Saving Scheme etc.

Interest rate for most of the schemes are 8%.Only SCSS offers 9% pa rate quarterly payable.Term deposits as well SCSS have tax benefits u/s.80C ofI.T.act.

6.FIXED MATURITY PLANS:These are debt products offered by mutual funds.Period typically ranges from 30Days to 3 Yrs.These plans are closed ended for respective periods.There is no share marketexposure of these products while whole investment is in fixed securities like fixed deposits and other government securities.Also FMPs offers indexation benefits at maturity and getting popularity as alternative to fixed deposits.

7.INSURANCE:Insurance companies offer different products like endowment,Moneyback and Unit-Linked Insurance Plans (ULIPs).ULIPS are less liquid,less flexible and expensive products while endowment and money back plans fails to beat inflation also.Though these products offers benefits of life insurance,this is not a correct way to get insured.

8.Precious metals: Gold and silver have remained to be the most attracive assets for investors in India.Silver have provided more than 100% returns in last one year.while Gold is providing consistant returns since last 10 Yrs.Both metals provide great divesification to portfolio and needs to accumulate on value averaging and systematic way.

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