1. PPF –Public Provident Fund is a product offered by Government of India. It offers fixed yearly interest which is revised every year. This is the highest income generating option among the fixed income products with approximately 7.6% interest. The minimum investment amount starts from Rs.500 to a maximum of Rs.1, 50,000. The main advantage over here is that it offers triple benefit to tax payer’s which means there is tax rebate on amount invested and interest & the maturity amount is completely tax free. The product comes with a lock in period of 15 years.
2. Equity Mutual Funds: For a new investor it is very difficult to start investment into direct equity, hence equity mutual fund is ideal product for them. Fund on behalf of investors invest into equity market and generate return for the investors. One should choose this product because it reduces the overall risk of equity investment due to diversification and it also helps in beating inflation in long term. One can start monthly investment with minimum amount of Rs. 500/- or can also invest lumpsum amount into it. This product is suitable for long term investment.
3. Bank Recurring Deposits: Bank RD is a product in which one can deposit fixed amount monthly for a specific period. The period of investment ranges from one to five years. At the end of this fixed tenure the funds are available to the investor. Through these deposits one inculcates a habit of savings .The rate of interest offered over here is equal to that of a fixed deposit and hence this option becomes easy for investors. Minimum amount to be deposited can vary from bank to bank. One can also avail loan against 80 %- 90%of the deposit amount.
4. Health Insurance: Why does one need health insurance if he or she is still young? That’s because life is uncertain and one can get health problems at any point of time. Many people argue as to why to buy health insurance when they can do the same amount of savings for themselves. In this world of inflation and unending expenses majority of the people do not tend to save for these kinds of emergencies. Buying a health insurance ensures a good amount of cover available for unforeseen major medical expenses.
5. Term insurance: Term insurance is a type of life cover which provides coverage for a fixed term. If the insured dies during the term of the policy then death benefit is payable to the nominee. There is no maturity benefit once the policy term expires. Term plans are specifically designed to secure one’s family needs in case of death or uncertainty. Here the premium is the lowest among all types of life insurance policies. The premium is low as there is no investment component and the entire premium goes for covering the risk. One should opt for this policy as soon as earning life is started.
Above discussed are some of the financial products through which one can start their financial journey and ensure safe future. There are other alternatives as well like bank savings account, liquid mutual funds etc. which can be used for keeping idle cash. So what was your first investment or financial product? Do share you financial journey with us.