Where you should invest after recent FD revised rates and banned on Rs 500 and 1,000 notes? Find 5 best ways to invest your hard earned money for better return. Currently the scenario of our nation is very dynamic. All credit to our Modi Government who overnight banned the highest currency denominations of the country i.e. Rs 500 and Rs 1000 notes. They are no more valid and legal. This is a sudden shock/surprise as nobody expected this to come. However, it has been done to bring down corruption and terrorism in the country and this move stands to be a good move by Government. However, People who have black money are worried because they do not have many options to keep their money secure. People having White money are happy with the decision.
After the decision, many changes have been seen and among them, the cut down in bank rates have been one. The banks have reduced the FD rates making people think where to invest their hard-earned money for better returns. Let us look what FD offers to the people and what other alternative Investments options are there for people.
To attain a financial security, people do invests in Fixed Deposits at the interest rate offered by their banks. FDs are locked in usually for a year period and can be renewed further. But the drawbacks of FDs are more than the return. It is because, now the interest rates are being lowered, people would slightly get higher return then interest earned on their savings accounts. Better use this fd calculator that give you exact return on your investment. Also, the investments done in FD are taxable which further decrease your overall return.
Investing in NCD
NCD is again one of the Debt options to have higher returns on Investments. About 8 to 8.5% after taxes can be yield from Investment in NCDs. You can invest in Muthoot Finance NCD that offer about 8.5% of interest. The risk is lower as compared to other options and yield high returns. But that does not mean NCDs are free from any risk of market. Risk of sudden decrease in interest rate is always there in NCD so it is recommended to hold the NCD until Maturity. Decide the tenure as per your preference .No tax on the interest is applicable on NCD, which means the interest earned is tax-free.
Investing in Real estate
Many people feel the investment on properties yields the best return and it is true to some extent too. But there has been huge dealing in Real estate sector in Black Money for betterment of both the parties. This has harmed government and now with the ban on currency, there has been a sudden fall in the rates of Properties sin the market. The reason being less number of potential buyers than the black money holders. Currently, the Home Loan rates have also been decreased by the banks and going by the scenario, people can invest in properties as home loan rates are also less and market rate of the properties have slurp down. But this would not be very long as it is speculated that by the end of 2017, the market would be inflated thus increasing the rates f properties. So to have huge profits in future, at present Investing in property seems to be best option if you are planning to invest and yield good returns.
Investing in Agricultural Land
One of the best options to invest is investing on Agricultural Land. Almost all the politicians have crores of agricutural land on their name and not because it is inherited but because it yield good returns. The biggest advantage is the benefit of Tax Break. Buy a land in any village you prefer and maintain the land with growing varieties of crops. This will yield many profits. You can earn hefty profits after the sale of the crops cultivated. This website http://www.kisanfarming.com providing good agricultural related business ideas step by step.In addition to this, you will also get the income from the rent of the land provided to a farmer for cultivating crops. Both the income types are tax-free. Agricultural land is free from wealth tax too. There have been certain risks attached too with the investment in agricultural land like illegal encroachment, legal complications etc.
Investing in Stock Market
Stock market is a very volatile sector to diverse your money and investments. It is because it comes with higher risk. Yes, the interest earned is higher too. For a beginner market fluctuations would be very dynamic and to understand it becomes very difficult. But the easy and simple understanding is buying shares/bonds at low prices and when the prices go up, sell them to earn profits. It is because when the price of the share/bond rises, the Yield value decreases. Price of Share and yield are related inversely to each other. Detailed information is available at https://en.wikipedia.org/wiki/Indian_stock_exchange. To understand this, lets’ look at an example. You buy a share with market rate of Rs 1000 at 10% coupon rate. The yield rate would be 10% (Rs100/Rs 1000). But when the share prices reduces and is Rs 800, the yield rate would increase to 12.5%(Rs 100/Rs 800) and if the value goes up say Rs 1200, the yield rate would decrease to 8.333% (Rs 100/Rs1200). This is due to guarantee money of Rs 100 on the asset value. The value changes but not the guaranteed money. Stock market has its own risks and so it is not advisable to invest more if you are a beginner. Investing for longer time period provides more return usually.
Investing in Public Provident Fund (PPF)
Among the safest in terms of risks, is the Public provident scheme for an investment option. PPF has a lock in period of 15 years and interest is compounded every year. So simply invest in PPF and forget it for 15 years. After 15 years, you would have a good sum of money you put in PPF years back. No such risks are involved in PPF. The only problem with PPF is you cannot withdraw your money before 6 years. That means until the end of 6 years your money is locked in and cannot be withdrawn even if you are in urgency to have them but you can take a loan on it if required.
Thus, out of various Investment options in India, at present the demonetisation have impacted public at large but in future, it would be for good. It cannot be said to be the best time to invest but yes, it definitely will be good to invest in other options other than investing in Fixed Deposits.