Brighten your financial future with the right financial instruments

6 MinsOctober 23, 2019

We all hope for a bright future. What better time to embark on this journey than during Diwali – The Festival of Lights. This is the time when we make way for new things in our lives, from clothes to furniture to cars and even homes. An auspicious time for new beginnings, Diwali is when we welcome Lakshmi, the Goddess of Wealth, into our homes. Hence, it is an appropriate time to invest our hard-earned money wisely, so that it can meet all our future needs.

financial future

By diversifying across the right financial instruments we can ensure that our money grows and that it is also available as and when we need it. Let us look at some of the must-have investments required for a sparkling financial future.

For regular savings and stable returns

Products such as Fixed Deposits and Recurring Deposits offer guaranteed returns and are good options for goals such as a foreign holiday, paying your children’s school fees, down payment for buying a home, refurbishing your home, etc. Another important reason why you must put aside some money regularly is to build an emergency corpus that can be drawn upon in case of an unexpected event, such as medical emergency or job loss.

Any surplus amount at the end of the month, after your EMIs and other expenses, or any additional amount you receive, such as gifts from relatives or bonus at work, can be invested in FDs. Or you can open an RD and start investing small amounts every month.

Axis Bank offers competitive interest rates and varying tenures for FDs and RDs. The process for opening the account is hassle-free and involves minimal documentation (zero documentation for A/c holders with KYC procedures completed). With an added option for zero penalty on the first premature withdrawal which can be up to 25% of the principal amount. Choose an FD with the tenure to match the time required for your goal and receive a fixed amount at maturity. Use the FD Calculator to plan how much and for how long you need to save.

You can invest in Axis Bank’s Express FD entirely online without opening an Axis Bank savings account, using your Aadhaar card as verification.

For wealth creation and building long-term corpus

Given the rising cost of living, equity investments must form a part of every investor’s portfolio. Especially for goals such as children’s higher education or marriage, or your retirement, that have a longer time horizon, of 10 to 15 years or more. Mutual Funds are a good option to achieve this as they offer inflation-beating tax-efficient returns, at low cost.

Select from a range of equity and debt mutual funds, such as liquid funds, large-cap funds, Equity Linked Savings Schemes and balanced funds. Choose funds based on your specific needs, be it investing surplus money, saving tax, investing for the long term, etc. Since mutual funds are linked to market movements, it is advisable to consult a financial advisor to help you choose the right fund for your portfolio.

[Also Read: Invest instantly with an Express FD]

To derive optimum benefit from mutual funds, remain invested for the long term. You can either invest lump sum (make a one-time investment) or regularly through Systematic Investment Plans (SIPs). Since the SIP is automated, the money gets invested before spending, thereby helping instil financial discipline. Additionally you can use Axis Bank’s SIP calculator to estimate your required investment basis various goals.

For retirement planning and post-retirement expenses

Today, most jobs don’t offer a pension. Hence, ensuring financial security during the autumn years is of utmost importance. For a regular source of income post-retirement, you should consider investing in the national pension scheme (NPS) during your working years. NPS also offers tax-saving benefits over and above the Rs 1.5 lakh offered by the instruments under Section 80C. There is an option to invest fully in debt instruments or debt plus equity investment. NPS has a built-in annuity component for 40% of the corpus which ensures a regular income after maturity.

Public Provident Fund (PPF) is another option for investment. A risk-free fixed income product with a lock-in period of 15 years. This makes it a must in your portfolio for saving for the post-retirement period. PPF offers tax exemption at the time of investing, interest accumulation and withdrawal. You can open PPF online and link it to your Axis Bank Savings Account.

Though both NPS and PPF have long lock-in periods, there is a flexibility of partial withdrawal before maturity, for specific reasons, such as medical emergency, building a house, educational purposes, etc.

For the protection of your loved ones and assets

Ensure your family’s well-being by buying Life Insurance. A term life plan will pay for your family’s needs in your absence, while money back plans can help to plan for expenses during your lifetime. Similarly, take care of rising health costs by buying adequate Health Insurance for yourself and your family. A comprehensive health insurance plan with the right kind of coverage and benefits ease your financial burden in a medical emergency. If you are planning to buy your dream vehicle this Diwali, protect it from damages on account of accidents or natural calamities by buying Motor Insurance.

Today, it is possible to do all your investments online, with minimum documentation. This makes the process extremely convenient and saves you time and effort. So, activate your internet banking or mobile banking app and light the lamp for a secure future!

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision

Mutual Fund investments are subject to market risk, read all scheme related documents carefully. Axis Bank Ltd is acting as an AMFI registered MF Distributor (ARN code: ARN-0019). Purchase of Mutual Funds by Axis Bank’s customer is purely voluntary and not linked to availment of any other facility from the Bank. *T&C apply

Savings bonds is another investment options ot choose from.