What are the Best Investment Options for Beginners or Amateur Investors in India?
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What are the Best Investment Options for Beginners or Amateur Investors in India?

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  • 29th Apr 2022
  • 2,116

 What are the Best Investment Options for Beginners or Amateur Investors in India?

In recent years, the investment market has been optimistic, naturally opening the doors to beginners or amateur investors in India.

If you wish to explore the world of financial investing but are apprehensive about what can happen, this article is for you. It will walk you through the finest options of investment for beginners looking to venture into new terrain and make money with ease.

Reliable Options of Investment for Beginners in India

  • Fixed Deposits

Fixed deposits are a type of investment issued by banks and other financial institutions in which you place a flat sum for a specific length of time and earn a set rate of interest. Unlike mutual funds and equities, fixed deposits provide comprehensive capital protection and a fixed rate of return. Nevertheless, you make no concessions regarding the returns, which stay the same. Therefore, fixed deposits are excellent for cautious investors and investment options for beginners. Fixed deposit interest rates fluctuate with the state of the economy and are set by banks in response to the RBI’s policy review decisions.

  • Fixed Deposits
What are the Best Investment Options for Beginners or Amateur Investors in India?

Fixed deposits are a type of investment issued by banks and other financial institutions in which you place a flat sum for a specific length of time and earn a set rate of interest. Unlike mutual funds and equities, fixed deposits provide comprehensive capital protection and a fixed rate of return. Nevertheless, you make no concessions regarding the returns, which stay the same. Therefore, fixed deposits are excellent for cautious investors and investment options for beginners. Fixed deposit interest rates fluctuate with the state of the economy and are set by banks in response to the RBI’s policy review decisions.

  • ULIP Plans

ULIPs are one of the safest and most suitable investment plans for beginners. ULIPs have one-of-a-kind investing structure and a 5-year statutory lock-in term. They’re a hybrid product that combines the advantages of both investing and life insurance into a single package. The monthly payment from investors in a ULIP plan is split into two parts: the first half is used to pay for life insurance premiums, and the second part is used to invest in financial instruments of your choice, such as equity, debt, or balanced funds. It’s worth noting that market circumstances influence the performance of ULIP funds.

  • Mutual Funds

Mutual fund is a vast pool of money from several people who desire to invest it in money market assets, including government bonds, corporate bonds, stocks, and commodities, among other things. It’s similar to a mutual fund created by several investors, where each investor’s fund contribution is invested in stocks or shares of their choosing, based on their financial goals. In essence, mutual funds enable you to invest in funds you may not otherwise be able to due to hefty investment costs. Mutual funds are also managed by certified fund managers who perform thorough research on the companies or funds to invest in, making it a safe investment for beginners in India.

  • RBI Bonds

RBI Bonds are one of the most popular tools of investment for beginners. The Reserve Bank of India, or RBI, sells bonds to the general public to raise funds for different government initiatives. These bonds have a set duration. Money is repaid along with the investment earnings via interest at the end of the term. Any of the 12 national banking institutions, as well as four private banks, sell RBI bonds. RBI will offer you a certification of holding to recognise your debt. Upon maturity, this certification will serve as proof.

  • Direct Equity

Direct equity, also known as stock investing, is the most powerful] option for investment for beginners in India. When you acquire stock in a firm, you purchase a portion of the company’s equity. You make a direct investment in the company’s advancement and growth. You need to have adequate time and market understanding to gain from your investment.

To summarise, investment for beginners holds immense potential. However, it is extremely crucial to familiarise yourself with the basics of investment options for beginners before diving in.

- A Consumer Education Initiative series by Kotak Life

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