Financial security is as essential as financial independence. Now that your business has provided you with the latter, it’s time to smartly invest a share of the profits into investment tools that will secure your financial future.
Given below are the top four investment options for businesswomen.
1. Fixed Deposit (FD)
For a safe investment option that carries low risk, Fixed Deposit (FD) is the ideal choice. FDs come with a mandatory lock-in period; if you withdraw before maturity, you will have to pay a penalty. For businesswomen, FDs offer a good source of security since the interest rate you receive is fixed. Even in the event of market fluctuations, your investment remains intact and the interest rate unchanged.
2. Public Provident Fund (PPF)
Another investment idea for entrepreneurs is to invest in a Public Provident Fund or PPF, which offers an interest rate of 7.10% as on April-June, 2021. This instrument has a mandatory lock-in period of 15 years, but you are allowed to withdraw partial sum after the completion of five years. Two main benefits of opening a PPF account is that you can start investing with as little as Rs. 500 per month, and the interest received under this instrument is tax-exempt as per the Income Tax Act’s Section 80 C.
Additional Read: Safe investments to ride out market volatility
3. Life and Health Insurance
Protecting your health and the health of your family members is crucial, and so is securing them financially in your absence. This is why you mustn’t shy away from buying a Life and Health Insurance policy. Life Insurance is also eligible for tax deductions under Section 80 C. Under Section 10 D, provisions are made for tax benefits on the maturity sum provided the premium was not more than 10% of the sum insured. Similarly, tax exemptions on the premium are also provided under Section 80 D for health insurance policies.
4. Mutual funds
These are perhaps the best investment option as there’s something for every kind of investor. For instance – If you are a risk-averse investor, you can invest in debt funds; if your risk tolerance is moderate, you can invest in balanced funds; and if you love taking some risks, equity funds are your ideal option. Plus, if you’re a beginner in the MF market and do not want to invest a lump sum, Systematic Investment Plans or SIP wherein you can invest a fixed sum every month are a good place to start. Even an SIP can be opened with as little as Rs. 500 per month, but they have a mandatory lock-in period of three years.
To avail of tax deductions, you can invest in Equity Linked Savings Scheme or ELSS. Do remember to ensure that the mutual funds you choose are in line with your investment goals, risk profile, and other requirements to achieve your financial goals on time.
Additional Read: Investment Strategy during Market Highs
Over to you
Want to build a solid portfolio from the comfort of your home? Just download Tata Capital’s Moneyfy app! Check out the top picks for the day, compare between different categories of funds, go through the features of each fund in detail, and make an informed choice.