Income Tax Filing Tips: 10 ways to invest your money wisely
New Delhi : Income Tax filing time has come where many of us look forward to increasing our investments which may help in saving tax and also better returns. According to experts, it is always beneficial to go for long-term investments. Here are 10 ways one can choose to invest his money wisely.
1. Fixed Deposits: Fixed Deposits or FDs is one of the most favourite types of investment when it comes to guaranteed returns. "If you are completely intolerant to taking risks, FDs should probably be your first choice of investment," said Mr Chandani of BankBazaar.
2. Recurring Deposit (RD): It allows the investor to save a fixed amount of money per month and get better interest compared to normal savings account. An investor can choose from a variety of terms - or maturity period to set up an RD account
3. Public provident fund (PPF): PPF account offers an interest at the rate of 8 per cent and comes with a lock-in period of 15 years. It also gives the investor to save on Income Tax as the investment money qualifies for Section 80C of tax exemption, also the interest and the maturity proceeds are entirely tax free.
4. Mutual funds: Mutual funds are one of the best options as the fund is managed by experts, who have knowledge about the equity markets. Stay alert on such investment because most of it are based on markets.
5. Fixed Maturity Plans (FMPs): FMP (or Fixed Maturity Plan) is a closed-ended debt mutual fund.
6. National Pension System (NPS): NPS, introduced by the government, allows individuals to contribute towards building a pension corpus throughout their working life. At the time of retirement, NPS subscribers can withdraw up to 60 per cent of corpus in lump sum, while the remaining 40 per cent of corpus can be used as annuity.
7. Insurance policies: One should also consider buying life insurance and health insurance policies for self and family.
8. Investing in equities: Equity investment is also a vital investment avenue.
9. Gold and gold-related investments: Gold is also a common investment for investors.
10. Investment in bonds: Investments into good quality bonds and debentures also ensure fixed returns and thereby facilitate greater stability to the portfolio performance, according to financial experts.