Safe investment options in a volatile market
November 04, 2020
Investing in the stock market when it is going through a volatile phase is a risky affair. While you may get to enjoy higher returns in a volatile market, the chances of capital erosion are also significantly higher. So, when you encounter such a situation, the right thing to do would be to choose safer investment options that can not only keep your investments intact, but also provide you with decent returns. If you’re looking for some of the best investment plans to park your money during a volatile market, you’ve come to the right place. Here are some such safe investment options to choose from.
Fixed Deposit (FD)
During volatile market scenarios, investors have time and again turned towards Fixed Deposits. Bank FDs are among the safest options available for investing your money. And the icing on the cake is that you don’t have to constantly monitor your investments. All that you have to do is deposit your money in a Fixed Deposit account with a bank for a specific tenure.
In exchange for your deposit, the bank offers you a fixed rate of interest on the principal amount. At the end of the tenure, the bank pays you back the principal amount along with the interest component. Fixed Deposits offer you a lot of flexibility with respect to the quantum of investment and the tenure. Additionally, you have the freedom to choose between regular interest payouts or cumulative interest accumulation.
Recurring Deposit (RD)
Recurring Deposits are also among the safest investment options available to you as an investor. Unlike a Fixed Deposit where you park a fixed sum of money, an RD requires you to make periodic deposits for a specified tenure. The bank, at the end of the tenure, pays the principal amount back to you along with the interest component.
A major advantage of Recurring Deposits is that you can choose to deposit a sum of money as low as Rs <1,000> each month. Bank RDs are the perfect option for meeting short-term financial goals and are widely considered to be the best investment plan to ensure safety and security of your capital. You can opt for the iWish flexible Recurring Deposit from ICICI Bank, where you can start investing with as little as Rs <50>.
In India, gold is a commodity that typically experiences high demand throughout the year. This is primarily because Indian investors hold gold in high regard and consider it to be one of the most attractive investment options available. The returns offered by this yellow metal are among the highest, and it gives you a relatively high amount of liquidity as well.
Since the demand for this precious metal is high in both India and in the global markets, the price of gold generally tends to be quite stable with minor fluctuations. Gold as an investment is also highly versatile, since it can either be held for the short-term or for the long-term. Investors who prefer not to possess physical gold, but still wish to enjoy the high returns that it offers, could opt for alternatives such as Digital gold, Gold bonds, or even Gold Exchange Traded Funds (ETFs).
Life Insurance Policy
This is arguably the best investment plan that an investor can choose to opt for when facing a volatile stock market. A Life Insurance policy, especially an endowment plan, gives you the dual benefits of a modest, handsome return on your investment along with a protective life cover. Insurance policies help you financially secure the future of your family in the event of any untoward incidents such as death or disability.
To enjoy the benefits of an insurance policy, you’re required to make regular and periodic premium payments to the insurer. In return for these payments, the insurer offers a protective life cover that pays out a certain specified sum of money to your beneficiaries in the event of your untimely demise before the end of the policy tenure. A Life Insurance policy with endowment benefits will also pay out a certain sum of money as maturity benefits at the end of the policy tenure, if you survive that tenure.
National Pension System (NPS)
The National Pension System (NPS) is the perfect choice for investors looking for a long-term option that offers maximum safety and security to the capital invested. This savings scheme is backed by the Government of India and aims to provide a source of income for individuals upon their retirement.
Since NPS offers a very attractive rate of interest that ranges anywhere between <7>% to <10>% and also comes with several tax benefits and exemptions, many consider it to be one of the best investment plans in the market.
By investing in these options during volatile market scenarios, your investment capital continues to generate returns. This allows you to achieve your financial goals on time and in a much easier manner. Furthermore, you could also diversify your investment portfolio by having a prudent mix of the above investment options. Such a move would help protect you financially at every stage of your life.
The contents of this document are meant merely for information purposes. The information contained herein is subject to updation, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient's own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith and sources considered reliable by lClCl Bank. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. 'lClCl ' and the 'I-man' logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.