For Many people Savings means Fixed Deposit or Recurring Deposit in a Bank or Post Office. But there are other options where investing your savings can help you earn more than Interest on Deposits.
Gold Bonds/ Public Provident Fund/ National Savings Certificate: These are issued by the Government of India, are completely safe and give good returns.
Insurance policies: Investing in Insurance Policies indemnify you against loss of life and property and also give risk free returns.
Debentures: All limited companies issue debentures. These are actually instruments of debts, that is, you give a loan to the company and earn interest thereof. These debentures can be redeemable, loan will be repaid by the company at the end of the said period.
Equities: These are also issued by limited companies. When you buy shares, you become owners of the company to the extent of your shareholding and are eligible for a share in profits called Dividends.
Mutual Funds: These are pooled funds of various small investors, which are then invested into Debentures and Equities, the ratio depending on the risk taking the capacity of the investor. They are also subject to Market Risks, but being managed by experts, the risks are marginalized. However, a study of various schemes is required before investing.
Direct Mutual Funds: They are same as Mutual Funds but with the difference that no distributor/agent is used, i.e. the investor directly invests in Mutual Funds thus saving on distributor fees/commission. This results in increase in profits due to reduction in expenses.
A word of caution : Do not to put all your eggs in one basket. Do not invest all your money in any one company or scheme. Study all available options and choose the one which gives requisite returns in the time you are aiming with the risk you can handle.
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