What is that one thing we salaried individuals look forward to every month? - An sms from the bank saying “you’re A/C number ending with xxxx has been credited with Rs. ####.” It’s an all too exciting feeling, but yes, you’ve now got to pay your bills. So what do you do after you’ve taken care of all your expenses? How do you manage what’s remaining? The wise thing to do is invest - invest to ensure a stress-free and successful financial life. Financial success is possible when you select the right investment at the right time.
To get started, here are some of the best investment options for salaried people:
- Unit Linked Insurance Plans
Investing in Unit Linked Insurance Plan (ULIP) offered by life insurance companies is a good idea. Here, a part of the premium you pay goes towards investments in government bonds, equity and debt securities that have varying risk levels. ULIPs have both insurance and investment components - you can benefit from market-linked returns and also have a life insurance cover. The insurer allots units to the investors and the net asset value is assessed and declared on an every-day basis. The tax advantage of investing in ULIP is that you can claim tax deductions under Section 80C for premiums (life insurance) paid.
Equities are a very popular investment option. Investments in equities can generate high returns, but you also have to keep in mind the high risk involved. If you are thinking about investing in equities, make sure you go with the right company. Look at how the company has performed with regards to its return on shareholders’ capital. It is always advisable to invest for the long term, preferably greater than 5 years.
- Public Provident Fund
If you’re looking for a safe investment option, consider going for Public Provident Fund. PPF is backed by the government and offers guaranteed returns. The interest you earn is not taxable, while the the deposits can be claimed as tax deductions under Section 80C of the Income Tax Act.
The kind of investment option you need to consider depends on the level of risk you’re willing to take. If your investments are aimed at tax benefits then opt for life insurance products, Equity Linked Savings Scheme, PPF, etc. If you are willing to bear the risk in hopes of high returns, equities are a good option. There are several investment options for salaried individuals. Choose your option wisely.
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