There are many investment options available in the market, but for those investors who are investing for the first time, it is difficult for them to decide which investment option they want to invest in. Therefore, it becomes necessary for them to understand the understanding of each instrument and the risks that come with it. According to experts, newcomers should always choose schemes that meet their financial goals. There are some popular investment options that you can choose from:
Fixed Deposit (FD)
Fixed deposits are the safest option to save. For the first time, investors should definitely keep some part of the money in the FD and choose the appropriate period for it. Manikkaran Singhal, a certified financial planner and founder of Goodmoneying.com, says, “The initial investor should start with an FD so that they can get information about banking and compounding.”
Public Provident Fund (PPF)
Public Provident Fund (PPF) is a post office savings scheme. PPF is an ideal option for first time investors, as it offers many benefits such as low risk appetite, tax benefits and steady interest on the money deposited. Manikaran Singhal says this is a better option for long-term investment.
Mutual Fund (MF)
Mutual funds are a better investment option for all irrespective of age and income, as it provides ease of investment, different types of funds and professional management. However, one should also understand the risks involved and choose the right fund according to the investment. Singhal says for the first time an investor should pay attention to the balance of funds or balance mutual funds. Since the new investor is not aware of the risk, therefore, balanced investment should be considered. It is a better option for long term investment.
Certified financial planners and experts say insurance should also be taken care of and should not be ignored. Because it is the foundation of everything, health insurance, life insurance, accidental insurance should be carried along. Insurance protects all these investment options.