You get a salary every month and spend most of it within a few weeks. This trend continues and you’ll be left with almost no savings after years of job. If you have to enjoy a bright future with your family, then invest your money depending on your risk profile; select the investment opportunity if you are a salaried person. If you want high yields, then you need to be prepared and also have the capacity to take the risk. You are a conservative investor if you are ready to settle for reduced yields and take fewer hazards.
We all have investment plans and we are all continually looking for a better investment for salaried person. But we’re all afraid to invest in the inappropriate place.
You should only invest after knowing the investment option’s pros and cons. I’m merely trying to make things simple for you.
Before entering into an investment plan, let’s comprehend a few investment fundamentals.
The salaried person should be invested in Public Provident Fund (PPF)
Investing a PPF account can save a lot of tax as all deposits made are deductible under Section 80C apart from your periodic pension contribution. Also, at the time of withdrawal, all the acquired principal and interest are exempt from tax.
Fixed Deposit is the best option for salaried person
Invest some money in FDs if you have the right amount of money to invest. The investment is protected and the interest you obtain. The interest is approximately 6.5-7 percent per year. Unfortunately, the interest is added to the taxable income and taxed according to your tax bracket. You could invest in a 5-year lock-in from FD. Tax saving FD, Interest is or can be reinvested on a monthly/quarterly basis. Investment in FDs is very secure. Tax saving FD also enables to save tax on the salaries.
National Pension System (NPS) is the best option for salaried person
The NPS plan can be ported across employment and places. The added advantage is the returns from investment in equity and debt.
Under section 80C, all contributions up to Rs. 1.5 Lac to Tier I capital is exempt. You can also claim an extra tax benefit of up to Rs. 50,000.
You can save Rs. 2 Lack of tax in NPS Scheme.
Equity Linked Savings Scheme (ELSS) is good for salaried person
Popularly known as ELSS, Equity Linked Saving Schemes invests most of your cash in equity. It makes ELSS a hazardous investment. But there is a grace to save. ELSS has a lock-in of 3 years. You have to remain in ELSS for three years compulsorily and equity usually does well over 3 years. You also experience a tax deduction under Section 80C, up to a maximum of Rs 1.5 Lakhs per year. ELSS is therefore very useful for the salary-earner. Be wise; make yourself rich.
Direct Equity Investment is better for salaried person
All investment in equity carries more significant hazards and is, therefore also able to generate tremendous yields. Choose the equity investment choice if you lose as much as 50% of the capital comfortably.
NSE’s last1-year yield is 12.40 percent, generating 26.5 percent yields in the last two years. Similarly, shares of blue-chip companies in the near past have yielded enormous returns.