Make your money grow, but traditionally? Fear of risking hard-earned money often makes us look for investment options with the least risk factors. Fixed deposits have been the go-to for most investors as market variations have the minimum impact on your funds. Yet the amount you collect after years and years of safe-keeping isn’t as attractive. Especially when inflation and even being higher tax bracket can adversely impact the returns from fixed deposits. It would be best to look out for investment instruments that regularly give you handsome yields after a tenure that you agree upon.
When looking for higher returns and also those who want regular income, there are some very attractive options that you can easily invest in and see your money grow.
Options beyond fixed deposits
- Debt Mutual Funds
You will be investing in high-rated fixed-income securities. Unlike regular mutual funds, these investments are relatively safer. The only risk factor that affects your investment is depreciation or appreciation of the invested funds. However, this investment does offer higher returns than fixed deposits, and you can easily liquidate your funds, making this a great alternative to a traditional form of investment. - Liquid Funds
A great alternative investment instrument that helps in beating inflation. With has a maturation period of 91 days. Liquid funds function just like debt funds. These happen to be highly rated investment options that have the edge over fixed deposits. They can be easily liquidated and great asset at the time of crisis. Liquids are known to be the most secure of all the available mutual fund options. - Equity Funds
Equity funds are one of the best investment options to diversify your investment portfolio. They provide relief when you are trying to beat inflation. You will need to hire a portfolio manager to make this investment, wherein you will become part of the ownership of the business. Such funds happen to be publicly traded stocks of companies. The returns are definitely higher than fixed deposits. Compared to other long-term investment options, it has the least amount of risk involved. - Corporate Fixed Deposits
This investment option is like a fixed deposit but offered by the corporates. However, you have better terms of interest rates, leading to higher returns of investments as compared to the usual bank fixed deposits. The tenure of deposits is also flexible, making it a very lucrative option for investors who should be willing to take a slight amount of risk. Though a good investment option if you choose well-established companies. - Fixed Maturity plans
You will get to invest in bonds and securities with a lock-in period of one year. These happen to be debt instruments and securities with coinciding maturities. Hence the investor cannot access it before the maturity period. You may find other options if you want a lesser tenure for your funds. But Fixed maturity plans are one of the better options to ordinary fixed deposits because the returns are quite attractive. However, it should be noted that this investment option isn’t as liquid, and if you don’t want to invest in the mentioned locked-in period, then fixed maturity isn’t a good option for you. The lucrative return is a big draw with relatively the lowest risk compared to other investment options discussed above.
Considering your risk appetite and expanding your investment horizon, you could choose some of the investment options to help you get higher returns. At the same time, you could evade the clasp of inflation impacting your funds.