Where to Invest in 2020 (with additional hidden tricks)

Where to Invest in 2020 (with additional hidden tricks)

So you got your first salary…Good…actually Great…checked. You were planning to spend it from last many months, even before you have got your first salary and now you finally have the same…checked. And then you party, party hard…another target checked. And then you come on the question which your near and deal one were reminding you from alas, long time back which you even cant remember. Then you finally decide, Ok I will invest…why not…every one does. But the next problematic questions comes in front of you – where to invest.

Welcome to the world of financial planning. At a time when interest rates are following on daily basis, youngsters are in constant search for new financial avenues to maximize the returns.

Lets look at the few of the evergreen and evolving  options available to us in 2020:

1.   Bank Fixed Deposit (FD) : The evergreen option for Indian is as good in 2020 as in last few decades. In last few years, the interest rates on fixed deposits have been significantly reduced by the Banks but still the inherent security of the fixed deposits continue to attract the millennial. Almost all Banks have options with varying options like monthly, quarterly and half yearly, etc.

·     The interest on the FDs are taxed by Government. To save the tax, one can opt for the 5 years Tax saver FD.

2.   RBI Taxable Bonds: Over the years, RBI Taxable Bonds are getting noticed for their inherent security and time to time attractive interest rates. Though these Bons are for a tenure of 7 years, the interest rate offered on these Bonds are quite good. Government has introduced 7.75 percent saving (Taxable) Bonds by replacing erstwhile 8 percent savings (Taxable) Bonds. A per the present policy, these bonds may by issues in demat form and credited to the Bond Ledger Acount (BLA) of the investor and a certificate of holding is given to the investor. This is given a proof of the investment.

·       Latest interest rates are 7.75%

3.   Equity (Direct Investment):  Stock market in India continues to be an elusive dream for many. Stocks are highly volatile asset with preset condition of entry and exit. Timing is the most important aspect of the investment in equity. Nevertheless it has been observed over the years that the returns in these equity stocks are very significant Also the popularity of “Stop Loss” as a concept has been able to significantly lower the risks associated with the equity. The concept of Stock Loss is that it signifies an advance order to sell a stock at a specific price.

·       Choose a breakage firm which charges lowest commission. Better choose a breakage firm which gives the certain free breakage.

4.     Public Provident Fund (PPF): is one of the most popular product in the market. PPF has one of the longest tenure in the market. But that in return is significantly impacting the compounding interest which this product provides. Also, both the principal and the interest provided is safe as the same is backed by the Government/ sovereign guarantee. PPF can be opened by with both Public Sector and Private Sector Banks.

·   SBI still holds the top position in provident fund management. Please compare the additional features which various Banks have started to give to attract customers to open FD with them before investing.

5.   Gold: Well, we are taking about real gold. Saving in gold and buying/ selling/ exchange of the same during the festival season is one of the top most and time tested practice in India. Though possessing gold has number of issues like safety and security concerns and high cost of possession, the inherent nature of the Gold which basically retails the value over the time make it an attractive proposition for all.

·     Customized Golds have a high makeup charge. For saving purpose, Gold can be kept in pure form. Various Banks and financial institutions are giving such services.