INSUBCONTINENT EXCLUSIVE:
These schemes offer good returns but investors need to figure out which one is meant for them.When it comes to investing money, a number of
questions come to mind such as which investment instrument gives the best returns, what is the risk involved, the time it will take for the
investment to mature, etc
Everyone wants to invest their hard-earned money in a way that they can avail maximum return in a specific tenure with minimum risk
Some people invest because they need financial security, others do so to achieve their economic goals
There are several vehicles that an investor can opt for such as Kisan Vikas Patra, fixed deposits, and mutual funds.Each of these
instruments offers good returns but investors need to figure out which one is meant for them
Let's see how these instruments stack up against each other.1.Kisan Vikas PatraA certificate scheme from the Indian Post, it offers to
double a one-time investment in approximately 10 years (124 months)
It is popularly known as KVP
The current interest rate offered is 6.9%, compounded annually
Initially, Kisan Vikas Patrawas aimed at enabling farmers to save for the long-term, but now the scheme is available for everyone
Offering a guaranteed sum on maturity, this one is primarily suitable for investors who are risk-averse
However, the returns are completely taxable.There are three types of KVP certificates
saving money, FD accounts are not dependent on market variations and offer a guaranteed, constant interest rate
The rate of interest for FDs is much higher than that of a savings bank account
Once the tenure of the deposit ends, investors can withdraw their money or reinvest it for another term
There are various types of FD accounts: the regular FD accounts for individuals less than 60 years, FD accounts for senior
citizens,tax-saving FD account, FD account with monthly payout (interest is paid every month and not compounded), etc
Different banks provide different interest rates and maturity periods.3.Mutual FundsThis investment instrument is for those who want their
wealth to grow faster and have an appetite for risk-taking
When an asset management company or fund house decides to pool investments from several individuals and institutional investors with common
objectives, it takes the mutual fund route.A fund manager, who is a finance professional, manages the pooled investment and purchases stocks
and bonds that are in line with the investment mandate
Each investor experiences profits or losses directly proportional to the amount they invested.
