As a young working professional, you would want to see your earnings grow at a steady pace so that you can build a sufficient corpus. Apart from your salary, you can set up a source of revenue by investing the money you earn.
Why is this important? It is because it helps you grow your money so you can meet your goals and responsibilities. In addition, it maintains the value of your money in inflationary conditions. However, it is all about finding instruments that balance high gains and risk. Evaluating investment options thoroughly and taking calculated risks can increase your finances significantly. To ensure you choose the right investment options, here’s a look at the top investment idea for young professionals in India that you should consider.
An investment option that offers excellent returns is stocks. They are considered to be risky, so don’t divert all your funds here. However, remember that when the company you invest in grows you benefit from a capital appreciation and if the firm decides to distribute profits, you get dividends. Stocks have also proven to be good at battling inflation and they can be traded at any time making them highly liquid.
To get started you need to open a demat account, and it’s best to do plenty of research and possibly contact a financial advisor before making an investment. That said, it’s a good idea to invest in stocks early in your career as your risk appetite and absorption capacity is high. Your responsibilities are scant at this stage and you have the rest of your career ahead of you. This gives you the potential you need to handle losses if any.
A mutual fund is another investment option that is risky, but offers returns in equal measure, typically around 15% if not higher. Mutual funds are easy to manage as you can either invest in a lump sum or through a Systematic Investment Plan (SIP). As a young professional SIPs are more beneficial as you can invest even a small amount each month and inculcate the habit of investing. Further, ELSS mutual funds help you save tax up under Section 80C and have the lowest lock-in period (of 3 years) as compared to other tax-saving instruments that qualify under this section.
A property can become a source of revenue for you if you invest strategically. While the lump sum amount required to make a property purchase is high, you can ease the burden by availing a home loan with the principal moratorium. With real estate, you not only gain from monthly rent but also from appreciation, and you can sell your property at any time too. A disadvantage though is that you. it is a time-consuming investment and requires more management too.
Public Provident Fund is one of the best investment options to consider if your portfolio is lacking a safe investment. This one is risk-free and offers returns of 8%, compounded annually. It has a lock-in period of 15 years making it a good long-term investment, and it enjoys Exempt, Exempt, Exempt status, which means it is a winner from a taxation standpoint as well.
When you choose a fixed deposit from an NBFC that has high ICRA and CRISIL ratings, you can get assured, high returns. For example, the Bajaj Finance Fixed Deposit offers Fixed Deposit rates that go up to 8.75% for regular users and 9.10% for senior citizens on a cumulative FD for at least 36 months. This is similar to PPF as it offers assured returns but better as it carries no lock-in period.
Apart from giving you high interest, the Bajaj Finance Fixed Deposit makes investments easy with simple eligibility criteria and online application. With just Rs.25,000, opening a Bajaj Finance FD is a matter of minutes. Further, you get a handsome 0.25% increase in interest when you renew your FD, so you can plan your investment by choosing between a tenor of 12 to 60 months. What’s more, to leave nothing to chance you can use the Bajaj Finance FD calculator to compute your earnings at maturity even before you invest!
So whether you’re awaiting your first salary or have been working for a few years, make sure you consider these investment options to secure your finances for the future.