Top 5 Investment Options for Women

July 29, 2020

top-5-investment-options-for-women

As today's women aspire to be financially independent and choose ambitious career routes, it is also crucial for them to think about financial security through investments. Read further to know the top 5 investment options for women.

In India, more and more women have started working and choosing to be financially independent. As much as they are driven by the desire to pursue high-powered careers, they also need to understand that financial security has equal importance along with financial independence. Investment should be a priority as you will need funds to accomplish goals like marriage, setting up funds for your child's education, and buying a house or others.

Most people tend to start building their portfolio in their 30s, but you should begin to invest from the time you start working to ensure financial security for yourself and your loved ones. When you start to search, you will find many roads that lead to wealth creation and there are no shortcuts to finding an ideal investment. Here are some of the investment options for women:

  1. PPF: Public Provident Fund or PPF offers an attractive interest rate of 7.9% per annum, which is tax-exempt under Section 80C of the Income Tax Act. With a lock-in period of 15 years, you can start investing a minimum amount of Rs 500 or invest a maximum of up to Rs 1.5 lakh in a year. You can also withdraw partially after completion of 5 years from the date of opening the PPF Account.
  2. NPS: National Pension System (NPS) is a market-linked savings scheme introduced by the IndianGovernment to help you accumulate funds for your retirement. Under the NPS scheme, an individual's savings is invested in a mixed portfolio, including Equity, Government Bonds, Liquid Funds, Corporate Bonds and Fixed Financial Instruments. The Pension Fund Regulatory and Development Authority (PFRDA) regulates the NPS. The scheme gives the flexibility to choose your Investment Fund Manager, fund options, Annuity service provider and Annuity option. The minimum contribution you need to make is Rs 6,000 in a financial year. NPS gives you two options – to choose assets as per your choice or the money gets invested automatically as per your age.
  3. Mutual Funds: This is the best investment for women who have moderate to high-risk appetite. You can choose to invest in Equity, Debt or Hybrid Funds depending on your financial goals. If you're a beginner, you can begin with a Systematic Investment Plan (SIP), which is affordable and good for long-term investment. If you have an aggressive investor and willing to put your funds, you can consider investing in Equity Linked Savings Scheme (ELSS). The scheme helps to create wealth as well as save tax under Section 80C of the Income Tax Act. ELSS has a lock-in period of 3 years. If you're expecting good returns, it is best to invest in the scheme for a maximum of 5 to 7 years.
  4. Life Insurance: Keeping your loved ones secured in your absence is all the more crucial. This is why you shouldn't shy away from buying a Life Insurance policy, especially when you have kids or dependent family members. The earlier you buy the policy, the less you will have to pay in terms of premium rate.
  5. Health Insurance: It is also essential to protect the health of you and your family members. Today, environmental hazards pose a big risk to health. In such times, a Health Insurance policy will take care of your medical expenses, thus keeping your savings intact.
  6. Fixed Deposit monthly income: Opening a Fixed Deposit with monthly income payout option will help deal with finances at the time of retirement when the source of income stops. This plan comprises of two phases – Investment and Payout. The minimum tenure of both phases is 24 months each. The interest rate will remain constant for the entire tenure. The interest payments for such a plan are subject to Tax Deducted at Source (TDS).

These are some of the top 5 investment options for women. Women need to know that financial independence is only valid when they know the importance of saving and investment. If not planned in advance,it can lead to financial strain in the long run.

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