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  • What gives more profit in Mutual Funds – LUMPSUM or MONTHLY SIP?

    Hello there! Let’s discuss mutual fund buying in India and the age-old argument between lump payment and monthly Systematic Investment Plans (SIPs).


    What are these two categories of assets, first? Lump-sum investing refers to investing a significant amount of cash in a mutual fund all at once. SIPs, on the other hand, entail making regular, typically monthly, investments of a set amount of money.

    Let’s now examine the advantages and disadvantages of each strategy.

    For those who have a large amount of cash accessible to spend, lump sum investments can be profitable. If the market is favourable, the investor can profit from instant returns while also earning sizeable returns in a brief amount of time. However, because the investment is made all at once, there are also greater dangers involved. If the market does badly, the owner could sustain sizable losses.

    SIPs, on the other hand, provide a more methodical strategy to investing. Investors can benefit from the power of compounding and average out the cost of investment by consistently spending a set sum of money. Due to the fact that the funding is stretched out over time, SIPs also assist in minimising the effects of market volatility. The profits, however, might be lower than those from lump-sum investments, and buyers might lose out on the chance to make more money quickly.

    Which is preferable, then? Your risk tolerance and financial objectives are really what determine this. Lump sum investments might be a wise choice if you have a large sum of money accessible and are prepared to take on greater risks. SIPs, on the other hand, might be a better option if you’re looking for a methodical approach to spending and are prepared to contribute over an extended period of time.

    Benefits of Lumpsum Purchases

    The possibility for greater profits quickly is one of the most important benefits of lump sum investments. Compared to a SIP, the individual can achieve substantial profits on their investment in a quicker amount of time if the market circumstances are advantageous. For those who have a large amount of cash on hand and want to make a sizable investment, lump sum purchases may also be advantageous.

    Cons: However, lump sum purchases also carry greater levels of risk. Since the investment is made all at once, the individual may sustain sizable losses if the market performs badly. Lumpsum investments are also not a good choice for investors who don’t have a lot of cash on hand because they might not be able to benefit from the possible profits.

    SIPs:
    Pros:
    The methodical strategy to investing that SIPs offer is among their biggest advantages. Investors can form the practise of saving and investing by setting aside a set quantity of money at regular intervals. As the purchaser gets units at various rates over time, this strategy also aids in averaging out the cost of the investment. Due to the fact that the funding is stretched out over time, SIPs also assist in minimising the effects of market volatility.

    Cons: SIP profits, however, might be less than those from lump-sum purchases. The possibility of greater returns over a brief period of time is less likely because the expenditure is spread out over time. Additionally, the investor might receive lower returns than they would have if they had made a single amount investment if the market performs badly over the course of the investment.

    In summation, SIPs and lump sum purchases each have advantages and disadvantages. Before choosing a course of action, it’s critical to think about your financial objectives and risk tolerance. Invest wisely!

  • Why stability is preferable to high returns in mutual funds

    Many investors are lured to mutual funds that provide significant returns when it comes to mutual fund investment. It’s crucial to keep in mind, though, that large rewards frequently come with great risk. Instead, stability ought to be taken into account heavily while selecting mutual funds.

    Stability is preferred over large returns in mutual funds for a number of reasons, including its capacity to reduce risk. Compared to funds that aim for high returns, those with a history of stable, moderate returns are less likely to suffer substantial losses. This can make it easier for investors to sleep at night because they are less likely to suffer substantial losses on their investments.

    Stability is preferred above big returns for another reason: it can aid investors in achieving their long-term financial objectives. Investors may be tempted to make rash, short-term financial decisions when they are concentrated on large returns. This may result in a lack of discipline in the investment process, which might eventually result in shorter-term results. Contrarily, funds that place a premium on stability can assist investors in staying the course even when the market is choppy, which can provide superior long-term outcomes.

    Additionally, stability may bring about mental tranquilly, which is crucial for investors who are getting close to retirement. Investors may be less inclined to assume the risk involved with high-return investments as they go closer to retirement. They would want to make a more secure investment that would generate a steady revenue stream in the future.

    In mutual funds, consistency is also preferred to strong returns since it helps increase portfolio diversity. The total risk of a portfolio can be reduced by diversifying assets across several sectors, industries, and funds with varied objectives. This can lessen the effect of any one specific market or industry on the portfolio as a whole.

    It’s essential to remember that not all stable funds are the same. Before investing, it’s crucial to conduct your homework and comprehend the track record and investment philosophy of the fund. When selecting a mutual fund, it’s also crucial to take into account your individual risk tolerance and investing objectives.

    In conclusion, stability must to be a top priority when selecting mutual funds, even when big returns could be alluring. Risk can be reduced by investing in funds with a history of steady, modest returns since they are less likely to suffer major losses. Additionally, stability may provide investors peace of mind, diversify their portfolio, and aid in achieving their long-term financial objectives. Before making an investment, it’s crucial to conduct your homework, comprehend the fund’s performance history and investment philosophy, and take into account your own risk appetite and investment objectives.

  • The Importance of Long-Term Mutual Fund Investing

    Particularly when it comes to long-term savings and retirement planning, investing in mutual funds may be a great instrument for reaching financial objectives. A form of investment instrument known as a mutual fund pools the funds of several participants to buy a diverse portfolio of stocks, bonds, and other assets. The expert management given by mutual fund managers may assist guarantee that the portfolio of the fund is well-diversified and managed in a way that is in line with the fund’s investment objectives. This diversity can help reduce risk.

    The potential for long-term development is one of the biggest advantages of investing in mutual funds, though. The importance of long-term mutual fund investing can be seen in the following ways:

    Compounding Interest: By making long-term investments, you may benefit from the strength of compound interest. The interest earned on the initial investment as well as the interest earned on prior interest is known as compound interest. The more time compounding has to work, the longer the investment is kept, leading to bigger returns over time.

    Volatility: Short-term trading can be dangerous and the stock market can be unpredictable. Long-term investors may withstand market swings and resist the urge to sell when the market is down by sticking with their investments. By doing this, the investor can benefit from market recoveries and prevent investments from being sold at a loss.

    Diversification: As was already noted, mutual funds offer asset diversification, which reduces risk. Mutual funds can lessen the effect of any one investment on the whole portfolio by investing in a number of other securities. By diversifying, an investor may guarantee that their portfolio is well-balanced and isn’t unduly exposed to any one industry or market.

    Professional Management: Professional fund managers who have the knowledge and skills to make investment choices on behalf of the fund’s investors oversee the management of mutual funds. This might make sure that the portfolio is well-diversified and managed in a way that is consistent with the investment goals of the fund.

    Tax Benefits: Some mutual funds offer tax benefits that may aid investors with their tax obligations. For instance, some mutual fund categories, such those that invest in municipal bonds, can be qualified for tax-free dividends.

    Mutual funds can entail some risk, like with any form of investment, so it’s vital to do your homework and fully understand the fund before you invest. When selecting a mutual fund, it’s also crucial to take into account your individual risk tolerance and investing objectives.

    Finally, investing in long-term mutual funds can be a useful strategy for reaching financial objectives, especially when it comes to long-term savings and retirement planning. Compound interest’s potency, the capacity to withstand market volatility, diversification, expert management, and tax advantages may all help an investment expand over time. When selecting mutual funds, it is crucial to conduct research, take into account your personal risk tolerance, and have clear investing objectives in mind so that you can make an educated choice that is consistent with your investment plan.

  • How can investing in mutual funds help in retirement planning?

    Financial planning must include retirement planning in order to guarantee a pleasant and long-lasting lifestyle when one’s working years are done. It is essential to have a strategy in place to maintain financial stability and self-sufficiency because of the increase in life expectancies and rising medical expenditures.

    Investing in mutual funds is one of the best methods to accomplish this. A form of investment instrument known as a mutual fund pools the funds of several participants to buy a diverse portfolio of stocks, bonds, and other assets.

    Investing in mutual funds can help with retirement planning for the following reasons:

    Potential for long-term growth: Investors may see long-term growth with mutual funds. This is due to the fact that mutual funds invest in a diverse portfolio of stocks, bonds, and other securities, which over time may generate a consistent flow of income.

    Asset diversification: Mutual funds offer a diverse portfolio of assets, which reduces risk. Mutual funds can lessen the effect of any one investment on the whole portfolio by investing in a number of other securities.

    Professional management: Professional fund managers who have the knowledge and skills to make investment choices on behalf of the fund’s investors oversee the management of mutual funds. This might make sure that the portfolio is well-diversified and managed in a way that is consistent with the investment goals of the fund.

    Automatic contributions are available with many mutual funds, which can make it simple to consistently save for retirement. This may be a practical approach to accumulate savings over time without having to give it much thought.

    Tax benefits: Some mutual funds offer tax benefits that may aid investors with their tax obligations. For instance, some mutual fund categories, such those that invest in municipal bonds, can be qualified for tax-free dividends.

    It’s crucial to keep in mind that there is some risk associated with investing in mutual funds, so do your homework and fully comprehend the fund before you do. When selecting a mutual fund, it’s also crucial to take into account your individual risk tolerance and investing objectives.

    When preparing for retirement, it’s crucial to invest for the long term and concentrate on asset diversification to lower risk. A well-diversified mutual fund portfolio can help assure a comfortable living in retirement by generating a consistent stream of income over time.

    As a result of its potential for asset development and diversification, expert management, automated contributions, and tax benefits, investing in mutual funds can be a useful tool for retirement planning. When selecting mutual funds, it’s crucial to conduct your homework, take into account your personal risk tolerance, and have financial goals in mind so that you can make an informed choice that works with your retirement plan.

  • The Different Types Of Mutual Funds

    There are several distinct types of mutual fund schemes available today, each designed to meet the specific requirements of a particular group of investors. The majority of mutual funds fall into one of three categories.

    Equity Funds, often called Growth Funds

    These investments focus mostly on equity, often known as shares of various corporations.
    The accumulation of wealth or an increase in value for the investment is the key goal.
    They have the potential to provide a bigger return, and as a result, the investments in them should be held for a longer period of time.

    These are some examples:

    “Large Cap” funds are funds that invest largely in businesses that are already quite large and well established.
    “Mid Cap funds” are investment vehicles that focus on mid-sized businesses. funds that invest mostly in enterprises of a medium-sized size.
    “Small Cap” funds are funds that invest in firms that are not very large.
    “Multi Cap” funds invest in a variety of different-sized firms, including both large and small ones.
    “Sector” funds are funds that invest in businesses that are all part of the same “sector” of the economy. For e.g. Technology funds that do not invest in any businesses other than those related to technology
    “Thematic” funds are funds that invest in a certain industry or sector. For e.g. Infrastructure funds that invest in businesses that would profit from the expansion of the infrastructure sector are called infrastructure investment funds.

    Tax-Saving Funds

    Funds of Income or Fixed Income from Bonds or Fixed Sources
    These are investments that are made in Fixed Income Securities, such as Government Securities or Bonds, Commercial Papers and Debentures, Bank Certificates of Deposit, and Money Market instruments such as Treasury Bills, Commercial Paper, and so on.
    These investments are less risky than others and are good options for anyone looking to generate income.
    Some examples are liquid funds, short-term funds, floating rate funds, dynamic bond funds, gilt funds, and corporate debt funds, among others.

    Hybrid Funds

    These make investments in both equities and fixed income, giving investors the opportunity to benefit from the potential for growth as well as the generation of income.
    Some examples include pension plans, child plans, and monthly income plans, as well as aggressive balanced funds and conservative balanced funds. Other examples include these types of plans and others.

  • What Is NAV And How Is It Calculated?

    If you have never invested in a mutual fund before, you might want to know what NAV stands for. NAV, which stands for “net asset value,” is a term for how much each unit of a mutual fund costs. The NAV is calculated every day based on the closing prices of all the securities that the different mutual fund schemes own. Unlike share prices, which change often during trading hours, the NAV is based on the closing prices of all the securities. The expenses of a mutual fund scheme, such as fund management, administration, distribution, etc., are charged in proportion to the scheme’s assets and are reflected in the NAV.

    How do you figure out NAV?

    Once you know what NAV is, you should be curious about how it is decided.

    A mutual fund company (AMC) asks people to join a new scheme through a “new fund offering” (NFO). In an NFO, each unit of a plan costs Rs 10. Let’s say that during the NFO, different investors give Rs 1,000 crores to the AMC. The fixed issue price of Rs 10 for NFO subscribers means that the AMC gives investors units based on how much money was raised. In this example, Rs 1 trillion was raised through the NFO, and Rs 10 was set as the NAV. Because of this, the AMC issues 100 billion units (1,000 billion rupees / 10 rupees NAV) and gives them to investors in proportion to how much they have invested. So, if you gave Rs 1 lakh to this NFO, you would get 10,000 units in return. So, you now know how NAV is calculated.

    Let’s look at this in more detail. According to the program mandate, the Rs 1,000 crores raised in the NFO are invested in a variety of assets. The market value of these assets changes every day. Let’s also say that the next day, the value of the scheme’s portfolio of assets goes up from Rs 1000 crore to Rs 1020 crore. For now, let’s forget about the costs of the plan to keep things simple. The plan’s NAV will be Rs. 10.2. (Rs 1,020 billion divided by 100 billion outstanding units) Your original Rs. 1 lakh NFO investment is now worth Rs. (10,000 units x Rs 10.20 NAV).

    With the NAV for the day, investors can buy or sell units in an open-ended mutual fund scheme at any time. If there is no exit load, investors can sell their shares for the same price as when they bought them (exit load is a charge applied by the scheme for redemptions within a certain specified period). In other words, NAV stands for the price at which investors can buy or sell units of a mutual fund.

    What does the net value of an asset mean for investors?
    Does the NAV really matter? NAV is the only thing that decides how many units you get for your investment amount. As an investor, you should care more about the value of your investment than the number of units you own. The growth of a scheme’s NAV is more important than the NAV itself. That is, return should be more important than NAV.

    The role of a fund’s NAV in how well it does
    Some investors think that NFOs are cheap because they are sold at a NAV of Rs. 10. The NAV of a mutual fund unit is based on the value of the securities it owns and the total amount of money it has made since the beginning of the scheme. Even though two different mutual fund schemes may have the exact same portfolio of securities, they might have different NAVs but the intrinsic value of both schemes will be the same.

    So, the NAV of a mutual fund scheme is not a good way to measure how well that scheme has done. Before choosing an investment, an investor should always think about how well the scheme has done in the past and how much it costs overall, among other things.

    Conclusion

    We’ve talked about what NAV means and how to figure it out. The NAV is only used to figure out how many units will be given to your investments. It doesn’t matter what the NAV was when you bought the units as much as how much their value has grown. The growth in NAV is much more important than NAV. With this information about NAV, you should be able to make better decisions about how to invest.

  • What Is A New Fund Offer In Mutual Funds?

    An asset management company sets up a new mutual fund using a New Fund Offer (NFO).

    The way the New Fund Offer works

    In a new fund offer, you only have a small window of time to sign up for the mutual fund plan. Investors can buy units of the mutual fund scheme and subscribe to the NFO at a certain price during the set time. This is usually sold for Rs. 10. After the term is over, investors will be able to buy fund units at the set price. In general, subscribers to NFOs have been able to make a lot more money after being listed.

    Why is the NFO such a great thing?

    Through an NFO, the fund house asks the public for money so it can buy securities like stocks, bonds, and other financial instruments on the market. Because NFO is a new product, it costs less than the funds that are already on the market. They are like initial public offerings (IPOs), in which shares are sold to the public before being listed on a stock market. Also, the many marketing strategies used to promote them make it an opportunity that is too good to pass up. Sometimes you have to use your smarts and common sense before picking one.

    When to put money into a New Fund Offer?

    When the markets are at their best, most investors look for ways to invest in mutual funds. They want to get into the investment market, whether it’s for gold or real estate, because they think it will continue to grow. But they also choose investments that make money but don’t cost as much. Asset management companies (AMCs) try to make money off of this way of thinking on the part of investors. This explains why people are more interested in NFOs that seem to cost less. Investors decide that NFOs are a good way to put their money to work and sign up for them. So, the fund companies might be able to reach their goal of increasing their Assets Under Management (AUM).

    Things investors should think about

    The credibility of the fund house
    Investors who want to put money into NFOs must do a lot of research on the fund house. Make sure that the fund house has been in the mutual fund business for a long time, preferably between five and ten years. You can use it to look at how the fund house has done during ups and downs in the market. If the fund firm has a good track record, the NFO could do what it says it will do.

    Funding Goals

    In the fund’s goals, things like the asset mix, level of risk, expected returns, and liquidity are all laid out. It helps you figure out if the NFO is possible. An NFO must give a detailed explanation of the investment process it will use for the time frame given. Simply put, it means that people who want to invest in the fund should read the offer document to learn more about how the fund management plans to use their money. If investors can’t figure out what the NFO’s goals are, this shows that there are problems with the way they do things.

    The theme of the new fund offer

    There are a lot of mutual fund programs in the Indian mutual fund industry. So, if you come across an NFO, you should read the fine print carefully to figure out what the fund is about. The investment topic needs to be long-lasting and different from what is already on there. But it’s usually not a good idea if you find out that the new fund offer is just a copy of a tactic that has already been used.

    If you’re interested in an NFO, it’s a good idea to look at past returns. The offer agreement might or might not say anything about this. You can look at the fund based on a rate of return that you think it will get. If you have already put money into the fund, you might want to look at it every three years for the first three years. To figure out the trend of returns, you can compare the performance of the mutual fund to that of the index and peer funds.

    Risk involved

    Putting money into NFOs could be risky. NFOs don’t have a track record of how well they’ve done, unlike existing funds, where it’s easy to check the asset allocation and risks. Also, you won’t know how the manager of the fund plans to use your money. If there were no benchmarks or measurements, it would be hard to predict how well the fund would do. It can be hard to know what happens to the fund, whether it succeeds or fails.

    Investment cost

    The total cost of the investment is one of the things that affect how much money you could make from it. Even though there is no entry load, you may have to pay an exit load if you want to cash in your units before the term ends. If the lock-in period is longer than your investment horizon, the exit loads may change how well your investment does. The expense ratio is another important factor. This is the fee that the fund house charges you every year to manage your money. It is best to find out if the ratio of expenses is less than or the same as what SEBI wants.

    The minimum cost of a subscription
    Most NFOs tell investors how much they need to put down before they can join. It could be anywhere between 500 and 5,000 rupees. As an investor, this could be the most important thing you use to narrow down your choices. If the minimum cost of a subscription is more than you can afford, you might want to look at your other options. In this case, you might want to choose a systematic investment plan (SIP), which is cheaper and easier to use and is part of a high-performing scheme that is already in place.

    Investment Horizon

    NFOs also have lock-in periods of between three and five years. You will be expected to maintain your investment for the whole term in such circumstances. Make sure your goals and time frame for investing match up with your investments. If you joined a mutual fund scheme, it’s possible that you won’t be able to cash in your units before they mature. In rare cases, you could also be charged a “pre-exit cost” or “exit load” for the same thing. If your chosen NFO lasts longer than your investment time frame, you might want to look at other options.

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  • Why SIP Is Important For You

    Putting money into mutual funds through a structured investment plan (SIP) has become very common. Read on to find out why mutual funds are such a good way to invest and how SIP can help you reach your long-term financial goals. Looking for good stock trading platforms? We offer the best online trading platform and the lowest brokerage for intraday trading. Everyone has hopes, dreams, and goals they want to reach. Everyone wants to feel safe about their money. For example, a new car, a bigger house, or a trip with the whole family to a faraway place. But you can only reach your goals if you put in the work that is needed to make them happen. Investing in mutual funds through a Systematic Investment Plan (SIP) could be a simple way to help you reach your goals. So, let’s look at what SIP stands for, how they work, what the benefits of SIP are, and how investing in SIP can make it seem like you can reach your financial goals.

    HOW DOES SIP WORK?

    A Systematic Investment Plan, or SIP, is an investment in a mutual fund that lets you invest slowly over time. It is a way to invest fixed amounts of money on a regular basis, such as monthly, quarterly, or every six months. If you invest consistently in this way, you may find it easier to reach your financial goals. To make money, you don’t have to time the market. With SIP investing, this uncertainty is taken away. Once you’ve chosen the term and frequency of your investments, you can choose to have them made automatically. Then, tell your bank to regularly move money from your bank account to the SIP mutual fund of your choice.

    WHAT’S GOOD ABOUT SIP IN MUTUAL FUNDS?

    The investments are not affected by the volatility of the market. The markets show what’s going on in the economy, and just like the economy, the markets go up and down. So, a drop in the market could wipe out some of your gains, but a SIP can turn this to your advantage. One of the benefits of SIP is that it keeps investors from gambling in markets that are very unstable. Investors may buy more units when the market is low and fewer units when the market is high. Because of this, the long-term average cost of each unit is expected to be less, and the returns on investments are good. Because you invest every month, the NAV of each scheme changes, so the number of units you get each month also changes. When the market goes up, the price goes up every month, and you get fewer units. When the cycle turns and markets start to fall, the price to buy drops and you start to get more units for the same amount of money. Rupee Cost Averaging is the process of investing at different times in the market so that the costs are spread out over a longer period of time.

    HELPS TO BUILD CORPUS WITH SMALL AMOUNTS

     Another benefit of SIP investment is that it lets you put as little as Rs. 500 per month into mutual funds. Even if you don’t have a lot of money, you may be able to benefit from India’s growth by investing in mutual funds. This could be a cheap way to put money away every month without going over budget. With the SIP step-up feature, you can increase the amount you put away each month as your income goes up. Investors can also add more money to their SIPs regularly through mutual fund firms. With a systematic investment plan (SIP), you invest the same amount of money in a mutual fund scheme every month. Over time, this adds up to a large corpus. One of the main reasons why your savings grow is because of compounding. Because mutual fund returns are re-invested and you get returns on your returns, you benefit from compounding, which is a simple but powerful force.

    YOU BECOME MORE DISCIPLINED WITH YOUR SAVINGS

    One of the most well-known benefits of SIP investments is that they allow investors to save money in a structured way. Also, a monthly budget helps teach people to be responsible with their money. SIPs are very flexible, so they can be stopped at any time and the amount invested can be increased or decreased. By using SIP to save first and spend later, you can follow the golden rule of personal finance. Now, all you have to do is pick a monthly SIP date that matches the date you get paid. And before you start spending, every month you’ll end up investing.

    BOTTOM LINE

    Investing in mutual funds through SIP has many benefits besides the top three listed here, such as convenience, diversification, flexibility, no fees to start a SIP, etc. Also, SIP goes against the idea that making money requires a lot of work and planning. In reality, SIP shows that you should avoid complicated investment strategies like “timing the market” and instead invest regularly to keep your money in good shape. If you are looking for a good stock trading platform, then check out Zubu’s website for the best online trading platformonline trading platform and lowest brokerage for intraday trading.

  • Six Of The Safest Investment Options For Risk-Averse Individuals

    In India, there are several investment opportunities that give attractive returns. With so many alternatives, it’s understandable that one would be confused about where to invest. To determine which investment channel is the ‘best,’ we must first assess an individual’s requirement and risk tolerance. There are investment solutions that are tailored to an individual’s objectives and needs.

    Indians prefer to invest in government-backed securities since they are viewed as safe investment vehicles. The following are a handful of India’s most popular investment avenues:

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    Bank Fixed Deposit (FD)

    Bank Fixed Deposit (FD) Bank FDs pay a substantially greater interest rate than standard savings bank accounts. 5-year tax-saving FDs are tax-deductible under Section 80C of the Income Tax Act, 1961, and investors can deduct up to Rs 1,50,000 per year. Senior citizens receive a little higher rate of interest on FDs. The rate of interest varies according to the duration of the investment, the amount invested, the resident status (NRI or not), and the bank. FDs are subject to a lock-in term. If you desire to withdraw within the lock-in period, the bank will charge you a penalty in the amount of interest deducted from the investment.

    The following are the primary features of bank deposits:
    You receive guaranteed returns over time.
    The most suitable investment for risk-averse investors.
    Partial withdrawals are permitted, as is borrowing against the balance.

    Public Provident Fund (PPF)

    PPF investments are subject to a 15-year lock-in term. PPF is regarded as one of the safest investments due to the scheme’s governmental guarantee. As with bank FDs, PPFs pay a substantially greater interest rate than a standard savings bank account.

    PPF’s key attributes include the following:
    Best suited for long-term financial goals due to the scheme’s 15-year lock-in period.
    Because the investment is not market-linked, it provides guaranteed returns over time.
    You have the choice of redeeming the entire corpus or extending the account for a five-year period.

    National Pension Scheme (NPS)

    The NPS is another government-sponsored retirement programme. The Pension Fund Regulatory and Development Authority manages the scheme (PFRDA). The NPS is made up of a variety of investments, including liquid funds, term deposits, and corporate bonds. There are numerous NPS schemes from which you can choose according to your needs. Interest rates vary amongst funds.

    NPS’s primary characteristics include the following:
    The scheme is offered to employees in all sectors.
    The scheme allows for annual tax deductions of up to Rs 2 lakh under the Income Tax Act, 1961.
    You can manage your portfolio passively or actively.

    Sovereign Gold Bonds

    Sovereign Gold Bonds Indians have a strong affinity toward the yellow metal. Gold investments are made through the purchase of gold jewellery, coins, and bars. Apart from real gold, investors can invest in gold through gold ETFs and sovereign gold bonds.

    SGB’s primary characteristics include the following:
    Investing in gold enables you to protect yourself against inflation.
    Due to the inverse relationship between gold and stock markets, investing in gold functions as a hedge against stock market declines.
    Gold’s price does not fluctuate dramatically over time, providing you with capital protection.
    SGBs give an interest of 2.5% per annum.
    The lock-in period is 8 years.
    SGBs are issued by the RBI.

    7.75% GoI Savings Bond

    7.75% G-Sec bonds replaced the previous 8% savings bond. These bonds were initially issued in 2018. As mentioned in the title, investors get annual interest at a rate of 7.75 percent. These bonds can be purchased for as little as Rs 1,000.

    The following are the primary characteristics of 7.75 percent GOI Savings Bonds:
    Your investments are guaranteed by governmental assurances, which safeguard your capital.
    You receive an assured annual rate of return of 7.75 percent.

    Recurring Deposit (RD)

    A recurring deposit is an alternative to a fixed-term deposit. Individuals invest a fixed sum on a regular basis using RDs. As with FDs, RDs pay a significantly greater rate of interest than a standard savings bank account. You can use your real estate development investment as collateral to obtain secured loans.

    RD’s primary characteristics include the following:
    Investing in an RD over a longer-term enables you to gradually instil a feeling of financial discipline.
    You do not need a significant sum to begin your investment; a small sum is sufficient.
    You have guaranteed profits over time because the investment is not tied to the stock market.

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  • Monthly vs Yearly SIP Investing: Which is Better?

    Now that you’ve learned everything there is to know about SIP investing, the big issue is: what is the ideal investment tenure? Should you make a monthly or annual SIP investment?

    Though many individuals are familiar with monthly SIPs, they are less familiar with annual SIPs.

    Assume Mr. A sets aside a portion of his monthly salary for the SIP investment before paying any other costs. He doesn’t have to worry about the investment frequency as long as his cash flow and investment frequency are both the same. It gets tough when he does not have a consistent cash flow because his investments will suffer. In such cases, he may want to explore a yearly SIP investment.

    People who are unable to make decisions based on what suits them and what does not can use basic calculations before making a decision. There are a number of SIP calculators online that can help you compare returns based on whether you invest monthly or annually. The calculations are based on the mutual fund’s NAV history, and the results can be derived for any investment period if the NAV data for that period is available.

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    Which SIP Investment yields the highest returns?

    It is widely assumed that more disciplined SIP investment yields higher returns. Regular investing will help you stay on top of market volatility because you will be investing at both high and low points. The average outcome will be perfect. If the market rises on the date of the investment for a SIP investment with a large gap between investment times, you will lose out on the rewards.

    On the other hand, if you are investing on a daily basis, you do not need to be concerned with market movement or keep a close eye on it. This is because you invest on a regular basis and the market is available to you at all times.

    When it comes to returns, the longer the investment time, the less variation there will be in the return value, regardless of the tenure you choose. According to research, the difference between daily, monthly, and quarterly SIP investments is only 1 to 2 percentage points. Even while daily SIP investments have always yielded higher returns, they have always been marginal.

    Cash Flow and SIP Investment
    SIP investments should always be assigned to your cash flow and income, as we’ve said many times before. A monthly SIP should be the most convenient option for salaried folks because they receive their pay on a monthly basis and can invest on a regular basis. They can easily provide their banks an ECS command to ensure that money is deducted from their accounts on a specific date.

    It’s best to keep the debit for the first week of each month so that you can prepare for the rest of your expenses. They must ensure that they have sufficient finances to make the SIP investment on a daily basis and that the investment is not stopped.

    The key benefit of having a daily SIP investment is that it allows you to average your investment costs. However, daily SIP investments are generally not suggested for a variety of reasons.

    The most typical reason is that your bank may refuse to transfer funds from your account on a daily basis. Second, there is a danger that you will miss a payment, which will jeopardise your investment. The last and most essential one is that calculating the tax due to capital gains will be a major headache.

    Because quarterly SIPs are not adept at capturing market changes, it is best to stick to monthly SIPs. Having a daily SIP investment can also result in 25-30 bank transfer entries, which might be difficult to keep track of. As a result, the best time to invest in SIPs is on a monthly basis.

    Risk Factor

    When selecting a SIP investment option, it’s important to consider the risk factor as well as the cash flow factor. The lower the SIP investment frequency, the greater the danger, because the market will vary and you will be unable to keep track of it.

    The frequency with which you invest should be determined by your willingness to incur risks. In such cases, monthly SIP investment is usually recommended because it gives you an advantage over other tenures, as well as the benefit of averaging rupee cost and assisting with cash flow management. Even if you receive a large sum, stay organised and invest wisely. At the end of the day, the decision is yours to make, and you have a greater understanding of your wealth objectives.

    As a reputed share broker company we offer lowest brokerage options and a seamless online trading platform to help you with your investment journey. Contact Zebu to know more on how to get started on your share market investment journey.