In today’s world, it is extremely important for a woman to achieve financial liberty and independence. For those with an impactful career and becoming an essential part of the workplace, financial empowerment is just as much an essential factor for a secured future; something that is applicable to the homemakers as well.
We believe that each and every woman must give thought to grow financially and secure their positions for the long term. This can be achieved by making the right investment decisions.
In fact, making investments related to market-linked instruments can serve as a constant income source like a simple job for ladies.
In India, there are plenty of investment options available that offer long-term benefits to long-term investors. However, everyone should understand how and where to invest their hard-earned money.
Investment options such as mutual funds and stocks help women in creating and incrementing and compounding liquid cash reserves. Financial instruments such as Fixed Deposit, PPF, and EPF can help in saving your money while saving one’s money.
Also, several investment options can be used to generate constant monthly income, by earning interest on the principal amount. Apart from this, investing in fixed assets can generate financial security over the years.
Here are the top 10 investment vehicles that can secure and empower Indian Women financially:
1. Public Provident Fund:
PPF is still considered one of the most popular investment plans in India. This scheme is available in post offices and banks.
This low investment scheme has a tenure of 15 years with an interest rate of 7.1% Also, the PPF scheme helps one to save a lot of tax. This is because an investment amount in PPF can be claimed for a tax deduction under Section 80c of the Income Tax Act.
The annual investment amount of the PPF scheme ranges from ₹500 to ₹1.5 Lakh.
The biggest benefit of investing in a PPF account is its flexibility. i.e once can withdraw 50% of the amount after completing 5 years in investing in the PPF scheme.
Furthermore, the accumulated interest amount and principal are also exempted from tax at the time of withdrawal.
2. National Pension Scheme:
NPS or National Pension Scheme is a long-term retired pension scheme that is movable across locations and jobs. That means you don’t require to change your fund while locating to another city or state.
The investment product is fully managed by the Pension Fund Regulatory and Development Authority (PFRDA). One of the prime benefits of having NPS is that you can generate returns from equity and debt.
While in PPF, you can only invest solely in interest-earning instruments.
The minimum annual contribution for an NPS tier I to remain active has been reduced to ₹1000 from ₹6000.
NPS is a mix of fixed deposits, corporate bonds, equities, corporate bonds, liquid funds, government funds and more.
3. Direct Equity:
Investing in stocks might not be everyone’s cup of tea but it is considered one of the most attractive options due to huge returns. In fact, a stock’s investment carries higher risk as it can generate higher returns.
Also, you can generate a yearly return of 15% – 18% from the stocks you invest in. For better investment, it is suggested to invest in the right stocks at the right time.
4. Employees’ Provident Fund
Employees’ provident fund is one of the best investment options for working women as with the help of schemes they can easily avail of tax benefits and gather tax-free savings.
According to the Government of India, new women employees are required to contribute only 8% instead of 10% for the first three years. This will certainly increase their take-home pay.
Under Section 80C of the Income Tax Act, the annual contribution up to ₹1.5 Lakh which you make towards the EPF account is free from tax.
5. Equity Linked Savings Scheme
Equity-linked savings schemes allow you to generate a higher rate of return about 15% to 18%. If we talk about the lock-in period, ELSS allows you to store away for just 3 years.
Any earnings that exceed ₹1 lakh are taxable. For better returns, one should keep in mind that ELSS can provide you with long term capital gains and taxed at 10%.
6. Bank Fixed Deposits
Bank Fixed deposits are another good investment for women that is available with both public and private sector banks. The investment amount and tenure are decided by the investor.
However, the interest rate of these deposits varies from bank to bank. As the investments have no maximum limits, fixed deposits can be broken and the amount can be withdrawn before the maturity date.
However, if one breaks the deposit before the completion of its tenure then it will affect the interest rate which is earned on the principal amount.
7. Mutual Funds
Mutual funds are also considered a good investment option, especially for women. Here, the investment amount is managed by the fund experts.
With SIP investment, you can earn subsequent wealth over a period of time, which reduces losses and maximizes ROI.
In mutual funds, investors can select the top funds offered by banks and numerous financial institutions. Also, it gives investors an opportunity to make choices from the products according to their requirements.
Mutual funds work on a strategy called a systematic investment plan or SIP wherein a specific amount is invested every month.
The key benefit of using SIP is to avoid huge losses.
8. Unit Linked Insurance Plan
Unit Linked Insurance Plan is the best way to create wealth with an addition to a life cover. The premiums that one pays for ULIP are eligible for deductions under section 80C.
Also, the return on maturity is exempted under section 10 10 (D). The returns generated from ULIP vary from the types of funds selected whether one opts for hybrid, debt or debt funds. Returns generated through ULIP are tax-free and could be quite impressive if the stock market performs well.
Buying gold is often considered a good investment option for Indian women. Although Gold prices are dynamic in nature, they can be considered as the safest instruments to invest in the long run.
Investment in gold requires no fixed quantity, which means as little as 5-gram gold coin in a year. Investing in gold gives you liquidity as when the price increases in the future, these coins can be exchanged either for cash or jewellery depends on the requirement.
10. Post Office Monthly Savings Scheme
Post office monthly income scheme aka Post office fixed deposit scheme is backed by the Government of India. This scheme holds a tenure of 5 years and the interest rate that is earned on this scheme is 6.9% per annum.
The minimum amount that can be deposited in the scheme is ₹1000 and the maximum amount that can be deposited is ₹1, 50, 000 per year.
Women spend 90 percent of their income on their families, and economically empowered women boost demand, have healthier and better-educated children, and raise human development levels.
On this women’s day, we firmly believe it is our moral obligation to empower women, to empower our Nation.