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Updated: Nov 19, 2021, 9:05pm
Managing your money in a world post the biggest pandemic in a century has to be well-thought keeping your present and future in mind. In 2021, you may not be able to simply park all your hard-earned money into basic investment options like a bank savings account to fetch a handsome return.
To ensure you are preparing yourself against the many emergencies and exigencies that may surprise you, you may have to follow a risk-based approach that would hedge your portfolio from sudden financial shocks.
We’ve analyzed investment options and divided them up into risk categories to help you create a balanced financial portfolio. Here are some of the best investment options you may want to consider.
This government-backed fixed income scheme can be considered a risk-free investment as its returns are guaranteed by the government.
Its features include:
Risk Level: Low to nil
Looked at as a risk-free investment, the NSC is a government-backed fixed income investment scheme.
Risk Level: Low to nil
The Indian government has opened direct purchase of bonds for individual investors, who could earlier trade in government bonds only like mutual funds, to encourage domestic participation in the sovereign bond market.
Risk Level: Low to nil
This scheme is for those who intend to build a robust retirement fund by investing their savings into a government-monitored pension fund that invests in diversified stock market portfolios including government bonds, corporate debentures and shares. The returns or the accumulated pension wealth made on such investments are used to purchase a life annuity and a portion is available for withdrawal at the end of the scheme cycle.
Two kinds of NPS accounts exist: Tier I NPS Account and Tier II NPS Account.
Risk Level: Low
SGBs are government securities issued by the Reserve Bank of India (RBI) and denominated in gram(s) of gold. They are issued in multiples of gram(s) of gold with a minimum investment of 1 gram.
Risk Level: Low to medium
An equity mutual fund is an investment vehicle that pools investors’ money and invests it in stocks to generate returns.
Risk Level: Medium to high
Gold ETFs are equivalent to buying gold in the physical form without the hassle of holding physical gold. They require investors to open a demat account and hold gold units in a dematerialized form similar to how investors hold mutual fund units.
Risk Level: Medium to high
Investing your money in financial products that could help you generate a return has its own risks. Before making an investment, it is prudent to learn about the prospective risks related to the product that you are investing in thoroughly.
Aashika is the India Editor for Forbes Advisor. Her 13-year business and finance journalism stint has led her to report, write, edit and lead teams covering public investing, private investing and personal investing both in India and overseas. She has previously worked at CNBC-TV18, Thomson Reuters, The Economic Times and Entrepreneur.
